Yet Another Tip on Champs Elysées Location

September 10, 2010

There are renewed rumors that Apple has found the perfect location along the Champs Elysées in Paris for a retail store, but it reportedly won’t open until 2016. The wide, tree-lined street is one of the most grand avenues in the world, and is home to many international retailers, including Louis Vuitton, Tommy Hilfiger and Yves Saint Laurent. Tipsters have told MacGeneration that Apple has selected #103, a six-level building that dates to 1899, and is now occupied by an HSBC bank branch. Earlier this year real estate sources said HSBC sold the building for $505 million but might lease the building back for several years.

In 2001 Sr. V-P Retail Ron Johnson mentioned the wide, iconic Champs Elysées as one of the locations where an Apple store must be located. Since then, there have been periodic vacancies along the street that appeared to be suitable, but without any action by Apple.

The street is considered one of the Top 10 retail locations in the world, and commands very high rents. Other high-profile retail locations include Fifth Avenue (NYC), Ginza (Tokyo), North Michigan Avenue (Chicago), New Bond Street (London), and Causeway Bay (Hong Kong). Apple already has stores in several of those locations.

The ornate building identified by tipsters is set on the south side of the Champs Elyseés, which retailers generally consider less desirable than the north side. The building is also beyond Avenue George V, further from the Arc de Triomphe, which has less foot traffic. And while the building is set at a corner, the cross-street is a minor one that seems to be the “back street” behind the adjacent Louis Vuitton store.

All of these factors affect the rent of retail space. Real estate sources say rent on the south side of the street (odd-numbered side) is about 30 percent lower than the north side. Retail spaces further from the Arc de Triomphe also command lower rents. Right now, the rent for southside, outer buildings—where this tip places an Apple store—averages about $830 per square-foot annually. That rent is about twice the average rent for the city’s Opéra district, where Apple’s second store opened earlier this year.

New York continues to be the most expensive retail city in the world, with an average of $1,725 per square-foot annually. Apple reportedly paid just $1,000 per square-foot for the Fifth Avenue retail store when it opened in 2006, part of incentives to build beneath the building’s plaza. Sydney, Hong Kong, London and Paris make up the next four highest retail rents, according to real estate research firm CB Richard Ellis.

The HSBC building comprises 357,000 square-feet, with nearly 25,000 square-feet of that on the ground floor. It’s constructed similarly to the Opéra Apple store, with a large skylight over the interior of the ground floor, which is tall enough for a mezzanine level.

The building was designed by noted French architect G.P. Chedanne, and constructed in 1899 for the Paris exposition of the next year. It originally housed the Hotel Elysées-Palace, reportedly the city’s first modern, luxury hotel. The building’s architecture falls into the “Belle Epoque” category, with many sculpted figures on the outside. Chedanne is also credited with the architecture for the Galeries Lafayette department store, just steps away from Apple’s existing Opéra retail store in Paris.

Other tips and rumors over the years have identified future Apple stores at La Defense north of city center, Les Quatre Temps, a shopping area northwest of the Arc de Triomphe, and at the Docks en Seine development along the river of the same name.

Read about the HSBC building, and about retail rents (pdf) in Paris.

Update: On September 18, 2010 a news report noted that #127 Champs Elyseés had been purchased by Immobilière Dissault for $117 million. The original Lancel clothing store was most-recently occupied by the French Tourist Authority, and has been vacant on-and-off for several years. I scouted the building in 2004 and concluded that its 60-foot wide storefront and location in the first block of the avenue made it a near-perfect location for an Apple store. The only drawback is that it’s on the south side of the street.

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