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SPR site visit to ICON Outlet at The O2
Peninsula Square, London SE10, Tuesday, 21 May 2019
Fiona Cohen, Associate Director of CBRE, the managing agents, led 20 SPR members on a tour of ICON Outlet at The O2, a joint venture between AEG and Crosstree Real Estate Partners. The 210,000 sq ft premium urban outlet opened in October 2018 and aims to capitalise on The O2’s position as the world’s number one entertainment venue – the main arena hosts some 210 events a year, attracting as many as 20,000 people on each occasion, and there is also a 19-screen cinema and over 30 bars and restaurants. Cohen explained that the broad range of acts bring in a big shopper base, which is supplemented by those living and working in the Greenwich Peninsular development and also at Canary Wharf, just one stop along the Jubilee Line.
ICON Outlet girdles one side of The O2 dome on two levels, bringing shopping to the destination for the first time. Cohen indicated that the units nearer The O2 entrance are mainly devoted to premium brands, while there are more standard “accessible premium and high street” retailers further into the project. Their leases, which generally run between 18 months and 5 years, comprise a base and turnover element, with the aim of providing a sustainable occupational model that shares risks fairly between the landlord and retailer. Since launching seven months ago, 81% of retail space is now open, fitting out or under offer.
Cohen shared the JV partners’ expressed intention that the project will come to rank among the top three outlet centres in the UK, partly through a strong focus on marketing – provision for which is included as a specific item in the tenants’ service charge. Part of the message is that the retailers here have a highly current offer, particularly in fashion – brands include Calvin Klein, Ted Baker, Tommy Hilfiger, Brooks Brothers and Jack Wills. In addition, Hotel Chocolat and Moleskine have also added to the retail mix, having opened their UK debut outlet stores at ICON. Currently dominated by fashion, the balance of the offer will change when Nike and Adidas open in the summer leading to a bigger emphasis on sports retail. F&B brands including by CHLOE and Hai Di Lao are also set to open in 2019.
Much of its potential success will depend on leveraging The O2’s existing events and destination footfall, which will help cement ICON Outlet in becoming a shopping destination in its own right, an area where The O2 network’s existing customer base should have a significant role to play. There are also some exciting new attractions lined up for ICON Outlet at The O2 including Showcase, a fashion events company which currently operates at their flagship store in Regent Street. Due to host their first sample sale event in June, Showcase broadens the outlet’s premium fashion appeal to its varying demographic.
Property researchers will be watching the progress of ICON Outlet with interest, not least because this is a unique concept that places outlet retail alongside a prime entertainment venue.