With e-commerce turnover progressing year on year, the retail industry hasn’t stopped evolving. High street businesses, shopping centres, trade parks, outlets, e-commerce, smart shopping, new IT and communication technology, emerging concepts, hybrid shops and the list continues.
Retail is multi-faceted and adapted to sustain the different components and evolutions of its environment. Physical distribution centres and online portails are now merging to create a global distribution strategy. It’s no longer about bricks and mortar versus e-commerce — the two are complimentary thanks to an omni-channel strategy. While the development of commercial activity relies on the frequency and implementation of these two key elements, there are also other settings to ensure a project’s success. To better understand these different facets of the retail universe, our teams work daily across the different Commerce spheres to better accompany you and your needs.
Find the BNP Paribas Real Estate Valuation At SIEC, the retail and commercial property fair on the 6th and 7th June 2018 at the Parc des Expositions in Paris (Porte de Versailles).
Over two days, SIEC unites French and European leaders from Retail and Commercial property. Meet 1600 designated representatives, as well as 1500 buyers, managers and investors, and 700 members from public bodies. Whether you’re an investor or a consumer, our teams are there to help you fulfill your commercial or retail property projects. Find our teams at SIEC from 21st to 22nd June 2017 - Paris, Porte de Versailles (Paris 15)
Commercial property: the starting point on the consumers’ market
Prime renting values maintain or reinforce the High Street in urban city centres.
Prime values in the heart of French cities maintain or reinforce themselves, whereas in medium-sized towns, they tend to stagnate, with a view to ggoing down. This is especially true for medium-sized towns where the commercial fabric appears to be unravelling.
Analysing vacancies within the town centre reveals a marked contrast with France’s commercial market, where certain towns are severely impacted with a vacancy rate over 10%.
However, other towns have always enjoyed a dynamic commercial fabric with a vacancy rate of less than 5%. However, the area’s socio-economic backdrop, a balanced variety of business types, and the quality of the environment generally equate to prosperous urban-centre businesses.
Street-level commerces: a well-established hierarchy of values between towns
At the top of the list: Paris, where there’s a high proportion of businesses situated at street level. Amongst the trends seen in Paris, include a rise in so-called local businesses (convenience stores and supermarkets); and shops selling organic and local produce or specialised nutritional products (pastry, chocolate, wine shops) have seen a strong uptake. Train stations and new urban areas which are emerging from the construction of the new Grand Paris Express metro lines, also have to concentrate on delivering a new commercial supply.
The Champs-Elysées, the ultimate showcase of international brands, has a prime rent value of €22,000/m²/per year. "The most beautiful avenue in the world", is also one of the most expensive streets in the world, along with New York’s 5th Avenue.
Cannes comes in second place with a prime rent value of €8,000/m²/year. An abundance of luxury brands along the Boulevard de la Croisette and the pull of the French Riviera for numerous tourists with disposable incomes explains this high sum.
Next are the key French cities (Lyon, Lille, Bordeaux, Toulouse, Nice, Strasbourg) with a prime rent value of more than €2,000/m²/year.
Shopping centres: new builds are accompanied by the expansion and renovation of existing sites
Shopping centre parks had an estimated value of €18.5 million per m² in 2017 and more than 37,600 sites amassed a turnover figure of around €130 bullion (both hypermarkets and supermarkets). Around 250,000m² sprung up in 2017 and the Paris region holds the majority of these new spaces, which are mostly centres comprised of 10,000 and 45,000m².
In order to seduce brands and attract consumers, funders increase services and commercial entertainment, call in renowned architects, and attract new brands (such as Five Guys at Bercy Village, Primark at Evry 2 or Lego at Forum des Halles).
PAC and retail parks: contrasting performances
The success of retail parks can be explained by their moderate building costs and new concepts which are more in line with the consumers’ wishes. Buyers which are currently less active on this market, such as urban centre and shopping centre brands (H&M, C&A, Naf Naf, San Marina, and Sephora) are showing more and more interest.
As for commercial activity parks, it’s the American distribution giant Costco which made headlines at the beginning of 2017 with the opening of its first "warehouse club" at Villebon-sur-Yvette, spanning 14,000m². In the last 10 years, the ambitious brand opened 15 shops across France, 4 - 6 of them around Paris.
However, the difficulties that face several sites shouldn’t be overlooked. Potential problems come from the transfer of brands trying to optimise their networking in new retail parks or in better-placed local business within the same commercial zone.