Primark is planning to expand its flagship store at the east end of Oxford Street by more than a quarter in 2016, following strong sales in its first year.
The value retailer has signed a deal to extend its store at 14-28 Oxford Street, near Tottenham Court Road tube station, by 40,910 sq ft, taking the total size to 189,760 sq ft.
The new space is set to open in the first quarter of 2016. Footwear chain Schuh has also taken an 11,5000 sq ft space in a neighbouring unit, the third major retailer to commit to the area since Primark opened. Office opened a 1,549 sq ft store in August, while Zara is to open a 35,000 sq ft unit nearby at 61-65 Oxford Street.
The moves come nearly a year into business improvement district New West End Company’s plans to revitalise the Bond Street,
Oxford Street and Regent Street area ahead of the Crossrail train line development, which is expected to see footfall in the district rise by 36%. Crossrail is due to be completed in 2018.
Erol Ezen, a partner at property firm BC Retail, which advised property owner Oriana, a joint venture between property fund manager Frogmore and developer Land Securities, on the Primark and Schuh lettings, said: “[Primark’s expansion] is one hell of a statement and the letting next door to Schuh at a record level of rent for the location underlines retailer confidence.”
In the year to February 2013, rental rates at the east end of Oxford Street increased 40%, rising to between £350 and £380 per square foot, according to property firm Jones Lang LaSalle. This is understood to have since increased to around £500 per square foot.
Schuh product and marketing director David Spencer said: “Although it is a fairly busy end of Oxford Street we felt that with the regeneration in the area, combined with the upgrading of the Tottenham Court Road Underground station and the opening of Crossrail in 2018, it could become even busier.”
BC Retail has only two units left in the development to let, which jointly total nearly 20,000 sq ft. “With the level of interest received so far I wouldn’t be at all surprised to see rents hit £500 per sq ft for Zone A [the most valuable shop floor space closest to the window],” Ezen said.
International brands, particularly those from the US, are also being targeted by retail property consultant David Kenningham, who is advising New West End Company on its retail strategy.
Primark has been increasing its retail portfolio this year, domestically and internationally, and is currently in talks to acquire the Pavilions shopping mall in Birmingham as it plots the opening of a 200,000 sq ft store in the city centre. The retailer is also planning to take over leases from BHS stores in Bath and Canterbury.