The Spotlight report, entitled Retail in France at the time of COVID-19 – September 2020, 9½ weeks (and 15 days) since lockdown, details how many elements of French retail have rebounded positively since the lockdown and Paris-based co-author Christian Nehme, director investment and lettings, co-head of retail at Savills, says that he also believes investors may turn back to the French retail market next year.
“Logistics has become quite expensive, with compressing yields, and offices will obviously be impacted by working from home and more flexible working patterns,” he says. “At the same time we can see that French retail remains resilient and has already weathered many storms, from the gilet jaunes to damaging strikes, even before COVID-19, then we believe shopping centres may become more attractive to investors.”
Although footfall at French stores remains below pre-COVID levels, it has grown steadily since lockdown finished. The report points to an uneven recovery across the French retail industry, with tourist-focused cities still hard hit while those that appeal to French national and smaller high streets have performed far better. Even within this broad data, Nehme says that, for example, several local Parisian areas are performing very strongly, while retailer footfall on the Champs Elysees remains 40% down, albeit that this is up from a low of -70%.
“Retail parks have also performed strongly,” says Nehme. “As consumers have returned to shopping their open-air nature and the fact that many have very good F&B and services has been very appealing for customer confidence.”
Going forwards, Savills is seeing more progressive discussions between landlords and retailers, with owners accepting that there needs to be a “little water in the wine” in terms of leases to help retailers through the COVID crisis. Many of the reductions and lease negotiations in the French retail market are already complete.
“It is still early days in terms of COVID-19 but I think we can clearly see that retailers are concentrating on perhaps less stores but a better experience,” says Nehme. “They are also focusing on how to combine digital and physical. French retail is very resilient and I am confident that the sector will continue to progress.”
Learn more about MAPIC 2020 digital edition.