Salvatore Ferragamo Italia SpA, the Italian luxury shoemaker that sold shares in an initial public offering in June, agreed to pay a record rent as the company renewed its lease on the U.K.’s most expensive shopping strip.
Ferragamo will to pay 1,000 pounds ($1,582) a square foot in Zone A rent for the store at 24 Old Bond Street in central London, Savills Plc, the broker for the property, said in a statement today. Zone A rent refers to the price a tenant pays for the most valuable part of the store, rather than the property as a whole, and is used to compare different buildings.
New Bond Street and Old Bond Street, known collectively as Bond Street, command the highest retail rents in London. The Ferragamo deal exceeds the 965 pounds Zone A rent that jeweler Piaget, a unit of Cie. Financiere Richemont SA, agreed to pay in December 2009 for 169 Old Bond Street.
“Due to its enduring appeal to luxury brands, we predict Bond Street will continue to see rents advancing strongly,” Paul Endicott, Savills’s director of retail leases, said in a statement. The company advised landlord NFU Mutual in leasing the 7,500 square-foot (700 square-meter) unit.
Investors are also bidding up values of stores on the street because of the long leases and regular, secure income generated by these properties.
Tribeca Holdings Ltd., a company managed by Irish investor Aidan Brooks, bought Cartier’s store on Bond Street for 18.7 million pounds in July. Annual rent equals 2.74 percent of the purchase price. Cartier’s Zone A rent is about 535 pounds a square foot and will probably rise when the company is due to renegotiate its rent in two years, according to Tribeca.
Ferragamo will pay 1.6 million pounds in annual rent for the Bond Street store, which it has occupied since 1967. Under the new lease, the Florence-based luxury retailer will enlarge its store to incorporate the first floor in addition to its basement and ground floor, Savills said in a statement.