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Record rent for the iconic Prada store in Galleria

24 December, La Repubblica

It was Prada that started a game which saw prices growing and growing. Prada triggered the bid that transformed Galleria into a money machine with its 59 thousand Sq m and 149 shop windows. In 2011, Prada beat Apple obtaining a 4,187 Sq m space from the ground to the top floor occupied at the time by McDonald’s. The brand made the record offer of 5.2 million euro per year for the first five years, which became 9 million with the agreement signed in 2013. Now that the contract is about to expire, Prada will pay to the City of Milan 2.2 million on top of the current yearly rent of 520 thousand euro in order to keep its location. With the new lease, the city administration will achieve incomes for 37.5 million in 2019. They were 26 million at the beginning of the Sala administration, 8.2 million in 2007.

This time, an auction wasn’t necessary to assign the spaces. As City Councillor for Budget Roberto Tasca explains, “the shop belongs to Milan’s cultural heritage”. After all, Prada was born in 1913 right here, from a small shop in Galleria that used sell suitcase, handbags and walking sticks in 1920. The products were so elegant, that Mario Prada ordered the mahogany and brass furniture from Pollard Padd in London, while the famous Scala theatre scenographer Nicola Benois created the two large panels.  These elements are still in the shop. As a result, the Ministry for Culture started a procedure to preserve the shop.

Following the same logic that forced the City of Milan of repeating the call of bids for the spaces of Gatto Rosso and Salotto, considering their historical value, the city administration decided to renew the lease for other 12 years. As Tasca remarks, the new contract “will be more convenient for the City administration, pursuing the road of preservation of the cultural heritage which has given excellent results so far, with the benefit of the city finances”. Moreover, the appeal of Galleria keeps growing thanks to the tourist and the international hype of Milan. Fashion brands are willing to pay high rents to secure a spot between marbles and frescoes. The latest offer comes from Moncler which will replace Urban Center. The brand had more than doubled the auction starting price for 1.2 million by bidding 2.5. Before that, Yves Saint Laurent offered raised the auction price from 131 thousand euro to one million for an 80 Sq m space with just one window. That’s the same money paid by Cracco for its multifloored restaurant. Tasca endorses this process: “the more we earn from Galleria, the fewer Milanese will have to pay. Galleria is open also at night. For me, the shopping centre option is not that bad as someone else say”.

Source: La Repubblica

Translator: Cristina Ambrosi