16 December 2014 | Sweden
The announcement of high-end Italian men’s retailer, Boggi Milano, opening in Stockholm in Spring 2015 is a clear sign of growing interest from luxury retailers in the Nordic markets.
Sweden, in particular, is seeing a strong upsurge, with a record number of global retailers now eyeing opportunities and planning their expansion. They’re encouraged by a range of factors including the country’s robust recovery from the financial crisis, a highly connected, fashionable and affluent consumer base and the fact that prime rents are considerably lower than their counterparts in markets such as London and Paris. However, as the supply of suitable units is restricted there is already clear upward pressure on rental values.
The New Boggi Milano store Stockholm, set to open Spring 2015
The retail sector is expanding faster than many others in Europe. Sweden’s retail sector, for example, is growing at 3.4% annually, which compares very favourably with other markets in Europe that are still struggling in the aftermath of the financial crisis. For example, previous retail powerhouses, such as Italy and Spain are growing at only 0.5% and 0.6% respectively. And there are challenges in other potential growth markets, too. Political uncertainties are spilling over into some emerging destinations in Central and Eastern Europe. Nordic markets such as Sweden therefore offer a relatively safe haven for retailers looking for growth in a climate of heightened economic and political risks. In addition, tenants in Sweden enjoy considerable legal rights, so security of tenure and predictable costs are also a powerful attraction.
But there’s much more to the appeal of Sweden than simply its comparative status with other locations. It’s a key destination in its own right. As Paolo Selva, Director of Establishment at Boggi Milano, points out “Sweden is the market of reference in the Nordic region with savvy, fashionable consumers. This is a business-oriented country with a solid economy marked by young, aspiring professionals.” Sweden’s fashionable status is also attracting interest from growing numbers of global tourists – and especially from Asia. Visitors from China with rising disposable incomes, in particular, are fuelling the demand for luxury retail as it becomes an almost expected element of their travels in Europe.
The impact of global trends is also shaping ownership of Swedish retail real estate. As more foreign owners become landlords in Sweden, part of the value that they bring to new markets is the introduction of international tenants. Both Sweden’s current largest malls are under French ownership, and there is considerable international interest in what will soon be the largest purpose built shopping centre in the region – the Mall of Scandinavia, scheduled for completion in Stockholm in 2015. Martin Lindgren, Head of Retail Agency JLL Sweden, says that the market looks very strong for the foreseeable future “With interest at a recent all-time high, we expect to see many new high-profile names arrive in the region. International retailers will need to move fast to make sure that they can secure the best sites.”
Martin Lindgren, Head of Retail Agency Sweden, JLL
Martin Lindgren is the Head of Retail Agency Sweden and is based in the Stockholm office. He is a member of the board for Nordic Council of Shopping Centers and expertise in the field has helped see major brands such as Boggi Milano, Michael Kors and Gerry Weber strengthen their presence within the Swedish market in locations such as Stockholm, Gothenburg and Malmoe.