Chiado Leads Growth of Street Shop Rents in Europe

 

1 September 2017

Chiado, in Lisbon, had the fastest growing rents in Europe concerning retail street locations in the second quarter, a study by Cushman & Wakefield revealed.

At €115/m² monthly, prime rents for street retail stores in the reference area in the Portuguese capital increased by 9.5% compared to March 2017 and 15% year-on-year. This figure compares with an average growth of only 0.2% in Europe. Lisbon leads the ranking, followed by the cities of Budapest (Vaci utca), Rome (via Condotti) and Milan (via Napoleone).

Underlining the continual strengthening of Lisbon’s street trade, the benchmark yield demanded by investors for the best assets, is currently at 4.75%.  This rate, according to Cushman & Wakefield, corresponds to the lowest recorded rate for real estate assets in Portugal and is only matched by offices on Avenida da Liberdade, also in Lisbon.

However, Cushman & Wakefield’s study, the DNA of Real Estate, also revealed that Lisbon’s street trade rents are the 4th lowest in the 22 European capitals analysed and the 9th lowest in the 45 cities covered by the study.

Among the capitals of the Old Continent, only Sofia, Bucharest and Warsaw had street retail rental costs below those found in Lisbon.  The growth in rents is “a fact associated with the growing flow of tourism and the immense interest in the Portuguese market shown by international retailers, which has sustained the highest growth in rents yet seen,” Cushman & Wakefield concluded.

According to the consultancy’s figures, more than 100 new street retail rental operations were carried out in Lisbon in the first half of 2017, of which more than 20% were in the Chiado area.

Original Story: Vida Imobiliária – Susana Correia

Translation: Richard Turner