April 26 - Demand for retail property in London's most expensive street reaches an all time high. Ivor Bennett reports that despite low rental yields, competition is as fierce as ever for a coveted Bond Street shopfront.
It's the most expensive street in London. Home to the top-end brands with clients - and cars to match. Shops on Bond Street sell for up to 100 million pounds, but demand right now, couldn't be higher. Mike Tremayne's head of West End Investment at property consultants Cushman and Wakefield. SOUNDBITE (English) MIKE TREMAYNE, HEAD OF WEST END INVESTMENT, CUSHMAN & WAKEFIELD, SAYING: "Everyone around the world has heard of Bond Street. You know on a Monopoly board it's got the biggest wealth of all the streets. it catches the essence of the overseas investor. And a lot of these guys are trophy hunting but also wanting to park their cash in a safe place. And Bond Street sums all of those attributes up." SOUNDBITE (English) IVOR BENNETT, REUTERS REPORTER, SAYING: "All the shops on the street scream luxury. Behind me there's Tiffany's. Mikimoto is next door, and Cartier a bit further along. Down the end is Louis Vuitton. But buying property here doesn't come cheap. Prices are in excess of 8 thousand pounds per square foot." Such high demand has driven rental returns down to record lows. Yields are now just 2.75 percent on the street, the first time they've been below 3. It's barely higher than even the safest government gilts - making this Bond by name, and nature. Despite the paltry returns... when it comes to property, there's no safer place. The market's so strong here that for every shop that becomes free, there's 10 retailers vying to move in. Savills' Investment Director Paul Cockburn says some will even pay for the privilege. SOUNDBITE (English) PAUL COCKBURN, DIRECTOR OF INVESTMENT, SAVILLS, SAYING: "It's really just a Bond Street phenomenon. There may be parts of Oxford Street and occasional units there but such is the level of demand between retailers that they'll pay multiples of the existing rent just to get in and that can be seven figures or more." French luxury brand Chanel recently paid 6 million pounds to a previous occupant, on top of a premium to the landlord. Individual demand is mostly coming from China and Singapore. It's so strong that British and Irish ownership on the street has dropped from over 90 percent ten years ago to less than 30 now. And it's not just London. Upmarket streets in Vienna and Paris are seeing similar floods of overseas investment, as buyers hunt for safe havens. And it won't be long before it pays off. Rents on Bond street have tripled in the last ten years to 1000 pounds per square foot, Projections are they only increase.