New York-based asset manager Blackstone has paid £230m for a 31,000 sq ft retail space on the affluent New Bond Street strip in the West End.
The asset, which is located at 130-134 New Bond Street, is leased to luxury watchmaker Breitling and Audemars Piguet, and to Church’s, the shoemaker, according to a report in The Times.
New Bond Street, a stone’s throw away from Oxford Street, is one of the most expensive streets in London, and is home to a number of luxury brands including Burberry, Cartier, Chanel, Gucci, Prada and Valentino.
Estate agent Cushman and Wakefield said it located it just second behind Europe’s most expensive drag Via Monte Napoleone in Milan.
James Seppala, Blackstone’s head of real estate in Europe, told The Times: “Luxury brands and retailers have really focused on expanding their footprints across some of these locations [where space] is finite. These streets only run from one end to another and they’re not getting any longer.”
Seppala said the retail sector is “interesting for investors,” he said.
He added: “It’s not necessarily luxury versus non-luxury, but at the same time I don’t think we’ll be buying an enclosed shopping mall on the outskirts of a small town next week.”
Blackstone owns a plethora of assets including country club, British warehouses and offices.
Its purchase of a retail asset represents a change in strategy. Rents and values of retail properties have fallen over the past decade, but signs of stabilisation have emerged in the past few months.
The attractiveness of retail values was also damaged by the pandemic after shoppers switched to online.
Seppala added: “Retail is such a huge sector, but there are certain formats, whether it’s grocery, retail parks, outlets or prime high street, that have demonstrated their resilience.”
City A.M. has contacted Blackstone for comment.