Budapest ranks 36th among the most admired retail destinations

Hong Kong is the world’s hottest retail market, attracting significantly more new entrants than any other city, according to the 2013 edition of How Global is the Business of Retail? by leading global property advisor CBRE. With 11 new retail brands entering the market Budapest has moved from 52nd position in 2011 to 36th position last year beating much larger markets such as Barcelona, Vienna and Prague.

CBRE’s annual survey, now in its sixth year, maps the global footprint of 320 of the world’s top retailers across more than 200 cities, tracking cross-border retailer movements. The report found that retailers expanded into a wide range of markets in 2012, with 81% of cities seeing at least one new retailer enter the market.

U.S. retailers are by far the most aggressive when expanding store networks globally. Traditionally U.S. retailers have focused on Asian and Western European markets; however, they are increasingly targeting the Middle East (18% of all new entrants to the region were from the U.S. last year), Central & Eastern Europe (17%), and Latin America (10%). Italian, British and French retailers are also highly active, focusing mainly on their own region, although Asia is also a key target.

Hong Kong was by far the most sought after city with 51 new retailer entries from all sectors – not just the high-end fashion brands that have traditionally targeted the market. These new entrants are principally from Europe, but also from the U.S., Japan and Korea.

Peter Gold, Managing Director – Retail, Cross-Border EMEA, CBRE, commented: “Hong Kong provides an opportunity for retailers to capitalise on the emerging middle class population and tourists from mainland China. Hong Kong is often used as a launch pad for brands entering the region although increasingly retailers are entering Chinese cities directly. While luxury brands led the way in 2012, retailers from across the spectrum opened their first store in the city last year, including Pierre Cardin, Forever 21 and Cos.”

Mature markets dominated retailers’ expansion plans last year although five emerging markets made the top 20. Kiev was in second place with 39 new entrants, with Sao Paulo (25 new entrants), Iasi (19), Muscat (17) and Ho Chi Minh City (15) also important targets. This is the second year that Kiev has been ranked in the top 3 globally. A combination of strong growth in real incomes and a serious under supply of quality retail space in the city is driving major shopping centre development, which in turn is attracting a wide range of retailers including Prada, Camper and S. Oliver.

Berlin was in third position in terms of new entrants (28) with Frankfurt (20), Hamburg (19) and Munich (19) also featuring in the top 20. Low unemployment, rising wages and employment levels at record highs have created strong fundamentals for consumption in Germany and are encouraging retailers to target a wide range of cities. Notable new entries in Berlin include Mulberry, Hollister, Pull & Bear, and Zara Home (which also entered Munich).

At a sector level, ‘Mid-Range’ fashion retailers entered more new markets than any other sector last year, accounting for 22% of all new openings, followed by ‘Luxury and Business Fashion’ retailers (20%). ‘Coffee and Restaurants’ (13%) is another growth area, as international retailers expand to meet consumer demand for entertainment-based retail.

The global rankings of retailer representation has not changed significantly in the last two years, as virtually all of the 320 retailers tracked typically have a presence in the leading retail markets. London retains its number one position, with Dubai still comfortably in second place. Paris moved up one place to third, replacing New York which is now in fourth place along with Moscow. Hong Kong and Madrid remained in sixth and seventh place respectively. The only significant mover was Beijing, which moved up to 8^th place from 13^th.

“In 2012 Budapest has improved its position in this ranking of over 200 cities; with 11 new retail brands entering the market Hungary has moved from 52^nd position in 2011 to 36^th position last year beating much larger markets such as Barcelona, Vienna and Prague. Some of the new retail brands that have opened shops in Budapest in 2012 include Massimo Duti, MONCLER, Parfois, CCC Shoes, the Buddha Bar. This trend seems to be continuing in 2013 as well with Nike having re-entered the market with a new master franchise partner, GAP soon opening a flagship store in the Örs Vezér tere Árkád extension and Croatian bakery Mlinar already opening 5 stores in Budapest this year. – Anita Csörgő Head of Retail at CBRE Budapest added.