The retail offer in Shoreditch in east London will evolve as a number of new hotels are set to transform the area into an increasingly international destination, according to a new report from property agency Savills.
There are seven hotels in the pipeline in the area including Gansevoort, Nobu and CitizenM, which will act as a draw for retailers that want to align themselves with the hotel brands and their clientele, the firm said.
Thanks to the new hotels there will be a 137% increase in overnight guests, from 130,000 to 308,000 people by the end of 2018.
Savills said the opening of the Boundary Hotel and Shoreditch House was a catalyst for the rising profile of Redchurch Street, which is now home to retailers including J Crew, Versace Versus and The Modern Society boutique.
Brands including Alexander McQueen and Belstaff have also opened at nearby Old Spitalfields Market.
“The attraction of the Shoreditch area was originally driven by its reputation as a creative hub, in turn boosting its visitor appeal,” explained Marie Hickey, director of Savills research.
“Hotel brands have latched onto this appeal. What is really interesting now is that we’re seeing international ‘luxury’ hotel brands such as Nobu and Gansevoort open their first London outposts in Shoreditch and it is the profile of these brands and their clientele, along with the office and residential story, that will be a key driver of the evolution of Shoreditch’s retail offer.”
She argued that the locations best placed to capitalise on the new visitor boom will be those under single ownership, like Old Spitalfields Market, which can “curate” the retail experience.
Savills research has noted that the rising demand for retail space is already feeding through to rental growth with an 11.8% average annual increase in prime ZA rents in the Shoreditch area over the last two years.
Oliver Green, director of retail at Savills, said: “A number of retailers are increasingly looking to the Shoreditch area in the same way they would look to the West End as they wish to gain exposure to London’s international visitors. We expect this to continue as schemes such as Old Spitalfields Market and Redchurch Street firmly establish themselves as shopping destinations.”
Savills pointed to restaurant Chiltern Firehouse opening on Chiltern Street in Marylebone and The Rosewood Hotel and The Hoxton hotel in Holborn as having a similar effect on these areas.