By Arash Massoudi and Claer Barrett
A record for the most expensive shop rent in the UK has been set with Italian fashion brand Salvatore Ferragamo agreeing to pay nearly ?1,000 a square foot a year for part of its space on Bond Street in a sign of rising demand for a presence on London?s most prestigious shopping thoroughfare.
The deal will break the previous Bond Street record set by Piaget, the Swiss jeweller, which agreed to pay a zone A rent of ?965 per square foot in December 2009.
Ferragamo has agreed to extend its lease of its store at 24 Bond Street with landlord NFU Mutual, a rural insurance provider and fund manager. The company now plans to invest in a refurbishment of the three-storey shop to maximise the sales area and sell a wider range of leather accessories.
?Companies have to be creative on Bond Street because there?s nothing available,? said Peter Mace, retail partner at Cushman & Wakefield, talking about luxury retailers? insatiable demand for property on London?s most prestigious shopping street.
He predicts that this deal will not remain a record for long and believes it is likely that ?in the next three to six months? rents will eclipse the ?1,200 per square foot barrier.
Bond Street rents have been boosted by the area?s popularity with high spending international tourists.
Research by the New West End Company predicts that total retail sales in the West End will hit ?7.7bn in 2012, a 3.5 per cent lift from last year, mainly driven up by the Olympics. It predicts Bond Street will capture one-fifth of this.
Savills, the property consultancy, acted for NFU Mutual. All parties declined to comment on the specific terms of the deal.
Ferragamo reported total revenues of 986.5m euros for the fiscal year 2011, a 26 per cent increase at current exchange rates from a year before. Footwear, handbags, and leather products made up 74 per cent of the group?s total turnover.
? The Financial Times Limited 2012