Amsterdam, Barcelona & Warsaw should be on the hit list for expanding international retail brands

16 November 2016

Amsterdam, Barcelona and Warsaw have been identified as rising stars in the European retail market in Savills latest European Retail Destination Index.

Although London and Paris took first and second place in the Index for having the best overall opportunities for expanding international brands, Amsterdam (third), Barcelona (fourth) and Warsaw (fifth), performed very strongly relative to their size and offer enhancing their attractiveness to international retailers, says Savills.

The international real estate advisor examined the total number of standalone stores the top 10 global fashion brands/groups (based on global turnover) have in each city relative to population to generate an ‘opportunity’ score, then compared this to total annual retail sales and total retailer occupational costs. Based on this approach, while Amsterdam, Barcelona and Warsaw may have lower total retail sales than Milan and Munich, their relatively low occupancy costs (€3,395, €3,477 and €1,725 per sq m per annum respectively) and high opportunity scores, imply greater profitability at a very high level. This ultimately means they have good potential for retailer expansion, although this will still be heavily dependent on the retailer and specific location.

Figure 1: Retail sales, ‘opportunity’ score and total occupational costs (€ per sq m per annum) excluding London and Paris (Savills Research/Oxford Economics)

In addition, Warsaw and Amsterdam are forecast to see strong sales increases over the next five years of 3.8% and 1.8% per annum respectively, with Warsaw expected to be the fastest growth market of all the 11 European cities examined. These cities are therefore likely to become increasingly attractive to expanding international brands, says Savills. Both cities are also supported by strong operational fundamentals in the form of low unemployment rates of 6.1% (Amsterdam) and 6.4% (Warsaw), which suggests stable retail spend levels by the resident population. Barcelona, meanwhile, is the largest European destination for international tourism spend once London and Paris are excluded. The city receives total visitor expenditure of €8.3 billion a year and is increasingly appearing on the radar of international retailers.

Marie Hickey, director in Savills research, comments: “For certain brands, particularly within the luxury space, markets with a relatively affluent population and large number of high spending international tourists are likely to have the strongest appeal. This explains why London and Paris have seen an influx of new luxury brands over the last three years. But smaller European ‘gateway’ cities will also prove attractive, particularly those where high spending international tourist arrivals are increasing. The real appeal of these smaller ‘gateway’ cities is likely to be within the midmarket and ‘aspirational’ retailer tier. As these types of brands account for the majority of the retail market, the appeal of the gateway European cities looks set to continue.”

Larry Brennan, chair of Savills European retail group, says: “Amsterdam, Barcelona and Warsaw are all solid performers, where the total occupational cost is relatively low compared to retail sales volumes, so we expect international expansion to pick up pace in these markets in the near future. Warsaw is set to be particularly strong as it is considered by many retailers as the gateway market to other central eastern European countries.”


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Marie Hickey

Marie Hickey

Commercial Research

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Larry Brennan

Larry Brennan

Head of European Retail Agency


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