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News Release


JLL announces Europe’s retail gateway cities

​JLL ranks London as the most attractive European city for international retailers, but Europe’s key retail cities continue to power ahead

​​​EMEA, 26 November, 2014 – London is the most attractive European location for international retailers according to a new cross-border retailer index​ compiled by global real estate adviser JLL. The index, launched today in a new report entitled Destination Europe 2015 analyses the expansion and presence of 250 international retailers across 57 key retail markets.

Main points:

• London has the highest presence of international retailers compared to European peers, followed by Paris, Moscow, Milan and Madrid.

• London’s Bond Street is Europe’s most attractive location for luxury retailers.

• The US has overtaken Italy as the largest exporter of cross-border retail fascias.

• Michael Kors, Superdry, Cos and 7 For All Mankind are the most expansive retailers. 

• Zara, H&M and Mango have the greatest retail coverage.

Europe’s retail powerhouses continue to surge ahead

“For international retailers looking for springboards into Europe, London leads the pack. Its retail market size, maturity, high degree of market transparency and retail friendliness make it a magnet for international retailers who are willing to pay a premium for the best locations. Other major global and mature European cities with similar appeal including Paris, Milan, Rome and the main German retail cities have similarly benefitted from international retailers’ thirst for growth and have attracted new brands despite continued headwinds plaguing Europe’s economy,” according to James Brown, Head of EMEA Retail Research & Consulting at JLL.

London has also increased its lead on Paris as the most attractive destination for luxury retailers in Europe. The report shows that there is clear water between these two world-renowned retail locations and the rest of Europe. This goes some way towards demonstrating the value luxury retailers place on having presence in iconic retailing locations and the scarcity of supply. As a consequence, retail space in New Bond Street can command the most expensive headline rents in Europe at €12,300 per sq m per year - an astonishing 42% growth on the levels achieved in 2012.

Retailers looking for new points of entry

James Dolphin, International Director, EMEA Retail Agency at JLL said: “Opportunities for expansion and entry into European markets are not limited to the global and mature markets; Moscow is growing and catching up fast, and may reach parity with Paris in the medium term in regard to international retailer presence.” 

The transitional markets of Moscow (3rd) and Istanbul (7th) have become Europe’s retail success story - no two cities have attracted as many new entrants over the past two years. Despite the increased levels of geo-political risk, Moscow’s retail market is thriving upon its sheer market size, fast rising levels of disposable incomes and rapidly growing shopping centre stock. Istanbul’s retail market is also revolutionising at great speed. Attracted by its modern high quality shopping centre stock such as the Zorlu Centre and the announcement of Galeries Lafayette anchoring Emaar Square, an increasing number of retailers are considering Istanbul as a first point of entry to Europe.

St. Petersburg and Kiev came into the top-20 of the most attractive cities for retailers. Russian’s “northern capital” shares the 12th place with Hamburg; the Ukrainian’s capital significantly improved in the rating from the 23rd to the 15th place compared to 2012, and shares it with Warsaw now.

Elena Zadorozhnaya, Head of Retail Tenant Representation, JLL Russia & CIS, commented: “It is worth noticing that current Russian and Ukrainian cities positions in the rating reflect retailers’ activity in these markets during the last two years – this is the recognition of their success. Now given the economic and political situation many retailers carefully assess new locations and hardly make any decisions on further expansion. At the same time they acknowledge the big potential of the Russian market and plenty opportunities for future development within two-four years if the environment becomes more positive and stable. Herewith it is the current unstable situation which gives them an opportunity to lease good places for flagship stores at reasonable price”.

“Further down the rankings, there are still plenty of strong retail markets which, despite healthy fundamentals and market opportunity, remain relatively untapped from an international retailer perspective. Examples include some of the larger UK and French regional cities and the Scandinavian markets,” adds Dolphin. 

Retailers show appetite for expansion

In comparison to Destination Europe 2013, a shift has occurred whereby mainstream and premium retailers have generally expanded at a faster rate than established luxury retailers, and therefore have moved up the rankings. H&M joins Zara as the joint leaders of the retailer coverage league​, with 100% presence across the 57 key European markets. They are followed by Mango and The Body Shop in the rankings. 

The US, driven by expanding premium retail brands, has overtaken Italy as the largest exporter of cross border retail fascias in Europe. The most expansive retailer in our sample is the American premium retailer Michael Kors, followed by Superdry, Cos and 7 For All Mankind*. In addition, many European retailers have also shown impressive expansion in the past two years, including Ecco and Hugo Boss. Looking to the future, an influx of brands is expected to enter the European market from the Asia-Pacific region.

“Russian market trends totally correspond to the European ones. According to our research, American brands became leaders in the number of debuts in the Russian market; the second place in this rating is occupied by the Italians, - Elena Zadorozhnaya said. – At the same, if we look at the most actively developing retailers in Russia there is only one monobrand boutique by Michael Kors whereas the other brands are still exploring the market opportunities and will be able to implement their plans in short- and medium-term prospect, according to our estimates.”

Commenting on the outlook for retailers in Europe, Brown observed: “While the recovery is certainly multi-speed in nature, Europe’s retail sales growth outlook is the brightest since the start of the decade. We expect international retailer expansion to continue its momentum across the key European retail markets; however physical expansion is more careful, more considered, and more selective than ever before, as sweeping structural changes further redefine retail and retail places. A consequence of this is considerable churn in retail stores in the European market. As a general rule, in the last two years, for every two stores opened, one store has closed down as retailers seek to work their stores harder and smarter”.

“Business optimization strategy is an important part of the current retailers’ business in Russia. At present their focus has shifted from territory expansion to the retail chain portfolio rationalization process – this is the hottest issue which worries the retailers’ absolute majority now. In our opinion, given expert macroeconomic forecast this trend will continue in 2015 as well,” - Elena Zadorozhnaya concludes.

​Accompanying infographics attached

Notes to Editors:

* JLL has worked extensively with 3 of the top 4 most expansive retailers in Europe to help them achieve their growth strategies; Michael Kors, Superdry and 7 For All Mankind.

About JLL

JLL (NYSE: JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. With annual fee revenue of $4.0 billion and gross revenue of $4.5 billion, JLL has more than 200 corporate offices, operates in 75 countries and has a global workforce of approximately 53,000. On behalf of its clients, the firm provides management and real estate outsourcing services for a property portfolio of 3.0 billion square feet, or 280.0 million square meters, and completed $99.0 billion in sales, acquisitions and finance transactions in 2013. Its investment management business, LaSalle Investment Management, has $50.0 billion of real estate assets under management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated.

In Russia and CIS JLL has offices in Moscow, St. Petersburg and Kiev. JLL, Russia & CIS was voted Consultant of the Year in 2004, 2006, 2007, 2008, 2009, 2010, 2011, 2012 , 2013 and 2014 at the Commercial Real Estate Awards, Moscow; Consultant of the Year at the Commercial Real Estate Awards 2009, St. Petersburg and The Best Real Estate Consultancy in Ukraine at the Ukrainian Property Awards in 2013.

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