Chanel pays major premium for Bond St store, sign of confidence in London

By

Sandra Halliday

Published
Oct 5, 2020

​Chanel has reportedly paid a massive price premium to buy its Bond Street store even though central London footfall remains weak and luxury sales are a long way from being in their recovery phase.

The purchase was reported by the Times, which said it has agreed to pay around £310 million for the property, around £70 million more than it had initially been thought to be worth.

The acquisition is likely to raise eyebrows given that Chanel accessed a £600 million loan under the UK’s Covid Corporate Financing Facility, although the company has stressed that the loan, which was taken out in April, has already been repaid in full.

Aside from that issue, the purchase of the property for such a high price is a sign of confidence in the central London retail property market and the fact that other bidders were in the race to buy it is also a sign of confidence.

The newspaper reported that other bidders included the Abu Dhabi Royal family, which owns a neighbouring property, as well as private investors from the US, Hong Kong and central Europe.

The fact that the three-storey boutique was on the market was reported back in August and it was seen as a key test of investor sentiment around London property. 

Bond Street has for some time been one of the most expensive retail destinations globally, but it was unclear whether it would retain its lustre post-pandemic in a West End that has been devastated by disappearing tourists and office workers.