It seems that, despite the difficult years we are experiencing amidst the pandemic, inflation and war in Ukraine, the luxury market knows no crisis. It’s often a sensation, but when it becomes evidence thanks to the data, you just need to acknowledge it. In particular, in Milan, the Quadrilatero della Moda area is increasingly attractive for shopkeepers – luxury boutiques of international caliber – and visitors, who never miss the opportunity to have their picture taken in front of the windows of their favorite brands. So much so that in 2022 Montenapo ranks third among the most expensive luxury shopping streets in the world.
This is in fact what “Main streets across the world 2022” reports, a report produced and published by Cushman & Wakefield, where it is highlighted that yes, the pandemic has somewhat shuffled the cards on the table with an average decrease in rental fees retail space rent by 13% during the COVID period, but the recovery has been there, with an increase of about half the percentage points during the post-pandemic.
Naturally, the impact of COVID has not always been the same in different areas of the world: if commercial rents have dropped by up to 28% in Ireland, the United Kingdom, Spain and France, it has gone better in other countries. Italy included, at least according to what the report says.
According to what we read, in fact, via Montenapoleone in Milan is the third most expensive shopping street in the world, with a truly stellar average rent, equal to 14,547 euros per square meter per year. A truly astronomical figure: considering that on average a boutique or flagship store can even exceed 100 square meters, we are talking about monthly rental prices that exceed 100 thousand euros per month.
The Milanese shopping street thus becomes the most expensive “high street” in Europe, overtaking New Bond Street in London and the Champs Elysees in Paris, which now, after the upheaval of the economy of recent times, are respectively fourth and in fifth place. So who’s above Milan? Without major surprises, the top step of the podium is firmly in the hands of New York’s Fifth Avenue, where the average rent costs 21,076 euros per square meter per year, followed by Tsim Sha Tsui, Hong Kong’s main shopping street Kong, where rents are close to 15,150 euros per square meter per year.
This is Cushman & Wakefield
The words of the head of the Italian division of Cushman & Wakefield, Joachim Sandberg, only reinforce the concept. In fact, he states that “via Montenapoleone is one of the most popular luxury shopping streets in the world, going against the trend and growing compared to 2019. This means that operators believe a lot in the location, and it remains important to invest in physical stores to strengthen brands”.
In fact, it is known that for luxury shops, having a flagship store in an exclusive street or in a fashion district allows them to have very high visibility in return. A truly fundamental marketing weapon, which also allows you to retain a good portion of customers.
It can still be improved
According to the Deloitte company, which (also) deals with market analysis, consumers love contact with the physical product so much that e-commerce is still a secondary sales channel. In Milan, in the Quadrilatero, in 2022 according to Deloitte there was a +20% of visitors compared to 2021, but a total purchase volume 32% lower than in 2019, the year before the pandemic.
That’s why there is still ample room for improvement. Without forgetting that Chinese tourists are missing, many of whom are forced to deal with the restrictions imposed by their government to fight the pandemic, and Russians, due to the thorny Ukrainian issue. Fortunately, the Americans are back, while the British are even more encouraged to buy, as after Brexit they are entitled to a VAT refund.