Prague's Na Prikope Street places 18th in Main Streets of the World survey

14-11-2003

Manhattan's Fifth Avenue, the Champs Elysees in Paris, London's Oxord street - these and other swanky avenues regularly finish at the top of a survey called Main Streets Across the World, published annually by real estate consultants Cushman & Wakefield Healey & Baker. The latest survey out this week has shown Prague's own Na Prikope Street has made it to the top 18. Jan Velinger spoke with Jonathan Hallett, the head of the Prague branch of Cushman & Wakefield Healey & Baker. He began by asking the realties expert whether Na Prikope Street's placing had come as a surprise, or was instead part of a continuing trend.

Na Prikope StreetNa Prikope Street "What we're actually seeing with Na Prikope in Prague is that in 2002 the street placed 25th as the most expensive street in the world. Now, in 2003, it's made it to 18th position and this represents a 25% increase in retail rents on Na Prikope in one year, which is very, very large growth. The reason for this is that basically the demand from retailers to be in this location is very, very high. What we have at the moment on Na Prikope is it's a fairly short street, most of the decent shops have been taken by local or international retailers, and it's very difficult to find good retail space. Part of the reason is not only because the demand is so high and there aren't so many buildings, but it's that you have very, very old, historic buildings in the centre of Prague 1, which are not only protected locally, but also by UNESCO. And one of the most difficult things you have is if you want big, modern retailing space it's easier to build a building to suit it, which you can not do on Na Prikope. Having the difficulty of old structured buildings, where it is difficult to change the facades and everything, it's not easy to match it with the modern needs of the modern retailer. So, hence, if you get a good shop which becomes available, which suits that retailer, the demand for it is very, very strong. A lot of retailers are fighting to get that space, and hence that sees the rise in the rents on the back of it."

Many of the buildings are historic as you say, but even if that has a certain disadvantage, on the other hand there's a certain 'class' I imagine that comes with the address...

"Oh, that's certainly the case. Because it's historic and because they're old buildings doesn't mean at all that it's less appealing to retailers, on the contrary - it's often very much more appealing. The specific thing about Na Prikope is not only that it's the prime retail location, it's also the prime office location, it's also one of the prime tourist destinations, and obviously if you didn't have the beautiful old buildings you wouldn't get the tourists. It varies on the retailer but within Na Prikope tourism can represent between 20 and up to 50 percent of retail turnover. The fact that you have the historic buildings draws a huge amount of that customer base. And this is really why the retailers are so desperate to get there, because they know that the turnovers per square metre are very high and therefore the rents are very high in comparison."

In terms of the specific numbers just how expensive are the rents on Na Prikope Street, compared to, say, New York's Fifth Avenue, which ranked first?

Na Prikope StreetNa Prikope Street "Well on Na Prikope the rents are now about 140 euro per square metre per month - which equates to about 1680 euro per annum. In comparison to Fifth Avenue it's almost 8,000, so there is still plenty of room for growth opportunities Na Prikope. The one thing that's clear is that if you're a retailer you look not only at the rent when you're trading: compared to New York Na Prikope has cheaper rents, cheaper staff employees, and if you can do similar profits to other markets, your profits are obviously going to be larger. I've spoken recently to some retailers and they've told me their shops on Na Prikope are trading better than their best shops in Paris."

One of the aspects often commented by Czechs, by Prague residents, is that many of the shops that you find on Na Prikope - despite its being a very classy street - remain accessible, even on a Czech budget.

"Yes, what, uh, what we're seeing is that many of the most expensive streets in Europe will not always have the most expensive shops present on that street. Na Prikope is a "high" street, a street where the fashion is available to the masses. We can compare it to Oxford Street in London, and if you look at Oxford Street you do not have the most upmarket brands. Traditional, good retailing streets where you have a lot of pedestrian flow are generally the most expensive, but it is mass turn-over that makes the difference, rather than having the highest prices. That is where Na Prikope stands."

{ed. note: It may interest readers to know that Na Prikope hosts not only international brands like Benetton and Zara but also Czech firms, or Czech-run franchises, that have been more than holding their own. If you find the subject of interest and would welcome a visit to Na Prikope Street, be sure to check out Spotlight in December, when we take you through the famous Czech avenue at the time when shoppers will be gearing up for the holiday season.}

14-11-2003