Fashion occupiers have long been found dotted around the West End, close to the retail heartland of Oxford Street and its surrounds. However, as Central London rents continue to rise many have been priced out of these core markets and are now looking further afield to fulfil their office requirements. Similarly over in New York, these types of occupiers are also starting to shun the traditional fashion hubs of Manhattan and the slightly hipper Brooklyn, to take up residence in Long Island City where occupational costs are significantly lower.

The fashion industry has always been sensitive to rises in property costs, especially with store portfolios and manufacturing costs to manage. After analysing retailers’ office headquarters leases in Central London, Savills has identified the potential rental uplift retailers might expect to face at their next rent review, or what they may end up paying if they look for new office premises in the current market. The findings suggest that there will be a sizeable increase, most notably in the City fringe and north of Oxford Street, where retailers could see an average uplift of up to 69 per cent and 57 per cent respectively, which is likely to leave retail occupiers out of pocket, designer or otherwise.

For this reason, a number of cost-savvy fashionistas are instead looking west. Here Grade A rents are approximately 23 per cent less than their Central London counterparts and the area is still trendy enough to attract and retain staff. Fashion giants Hugo Boss and Net-A-Porter are both rumoured to be under offer at Media Village in White City, which could spark further moves as others start to follow the cool crowd.

New York has also seen dramatic rental growth, specifically in the garment district with Long Island City rents up to 54 per cent cheaper when compared with Midtown. As a result, fashion occupiers have embraced its authentic old-style factory buildings, taking advantage of the high ceilings and exposed services, which are often replicated elsewhere by developers looking to attract these kinds of businesses. J Crew, Polo Ralph Lauren and Macy’s, to name but a few, have all hopped on the subway and headed 10 minutes out of town to save dollars.

Much like Long Island City, West London is also becoming increasingly attractive. New developments such as the Clockwork Building in Hammersmith and the aforementioned Media Village are ideal for these types of occupiers. At the start of 2016 there was said to be around 280,000 sq ft (26,000 sq m) of requirements from fashion companies considering the area as an office headquarter location, indicating the scale of this potential migration. With Stella McCartney and Victoria Beckham seemingly checking out the local lunch spots, London fashion appears to be on a catwalk heading west.

From London to NYC, the traditional centres for these types of occupiers might be going out of fashion.

Further information

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