Q3 2015 Retail MarketBeat is a brief summary of the Retail sector in France, providing comment on recent trends as well as market data and analysis of the impact on commercial real estate.

1. RETAIL MARKETBEAT
France | Q3 2015
cushmanwakefield.com

2. Retail Marketbeat France | 2
ECONOMY
The marked slowdown of the French economy in the second quarter
of 2015 (0.0%, after +0.7% in the first quarter) explains the slight
downward adjustment in outlook for GDP growth. With expected
growth of 1.1% for the full year, there is no doubt that 2015 will be an
improvement over 2014 (+0.2%).
Slower household consumption played a critical role in the poor
results for the second quarter of 2015. However, the 1.6% annual rise
in consumer spending is a significant acceleration compared with
2014 (+0.6%). In addition, numerous economic indicators have turned
more positive since last year, and now suggest that retail sales will
enjoy sustainable growth. Even if the unemployment rate remains
high, a strengthening economy, combined with the effects of the Tax
Credit for Competitiveness and Employment (CICE) and the
Responsibility and Solidarity Agreement, is beginning to pay off. Job
creation in the market sector has shown sharp improvement (+41,000
jobs expected in 2015 after a loss of 63,000 jobs in 2014). Falling oil
prices are keeping inflation at very low levels, while consumer
purchasing power is higher than it has been since 2007. In sum, the
French seem more willing to consume. In September 2015, the
consumer-confidence index reached levels (97) not seen since
October 2007, though still under the long-term average of 100.
While the gradual improvement of the economy has not yet
translated into overall recovery in retail, certain activities are
performing well or recovering. The rebound in furniture sales (+2% at
the end of August 2015, according to the IPEA), their strongest since
2011, are worthy of note, while the sectors of hygiene, health, and
beauty, of culture, and of entertainment are all showing momentum.
Clothing retailers have had uneven results. The IMF estimates that
consumption of clothing fell by 0.4% year on year during the first
eight months of 2015. In this highly competitive sector, subject to
consumer whims and rapidly changing fashions, the challenges and
store-closings of long-standing “historic” brands have increased
(Gérard Darel, Façonnable, La Halle, Rodier, Bata, etc.). Furthermore,
retail websites continue to take market share of the French
consumer’s total clothing budget. Online sales now account for 15.4%
of total retail sales, compared with 2% in 2006 (source: IMF).
RETAIL MARKETBEAT
France | Q3 2015
ECONOMIC INDICATORS (%)
2014 2015e
GDP growth 0;2 1.1
Consumer prices 0.5 0.3
Unemployment rate¹ 10.5 10.3
Household confidence² 86 97
Household consumption 0.6 1.6
Sources: INSEE, Oxford Economics / E: estimate / ¹France, incl. overseas territories /
²Synthetic performance indicator at the end of September of each year.

3. Retail Marketbeat France | 3
FOCUS ON THE RESTAURANT SECTOR
According to a recent INSEE study,¹ the number of businesses in the
restaurant sector grew 3% between 2009 and 2012. Fast food has
shown particularly vigorous growth—15% over the same period—far
ahead of traditional restaurants (+2%) and bars (−6%). These
contrasting performances can explain the challenges facing
traditional chains (Groupe Flo) and the major strategic changes under
way in the restaurant sector.
In the fast-food segment, hamburgers are enjoying an especially
favorable context. In 2014, burger sales reached 1.07 billion in France,
a 10% rise year on year.² Burger King is an example of the perfect
success story. The American group’s network could expand even
faster if negotiations succeed for the acquisition of Quick Group.
Parallel to the Burger King phenomenon, several upscale burger
formats have emerged. Big Fernand has opened numerous outlets in
high streets and shopping centers (Val d’Europe, Les Docks
Marseille), and other such chains are expected soon in France (e.g.,
Five Guys and Steak ’n Shake). The fast-food market is also driven by
a myriad of concepts that offer other types of products, whether
recent newcomers such as Vapiano, Chipotle, Costa Coffee, and Prêt
à Manger, or international groups long established in France. One
such example is Starbucks, which is opening new sales points in
various formats (franchises, train stations, airports, etc.).
The recent agreement concluded between Starbucks and Monoprix
for the development of shop-in-shops illustrates the variety of
approaches to retailing and reveals the changing behavior of the
French consumer. Growing competition among retailers and the
importance of consumer choices require a denser network of outlets
that bring the products closer to the consumer. Food retailers tend to
position themselves on numerous fronts, thereby whetting the
appetite of landlords. With an array of high-quality food concepts at
their disposal, landlords are able to employ the range of their supply
as an additional strategy for increasing the time spent by consumers
in their shopping centers. This strategy is clearly illustrated by
Unibail-Rodamco’s Dining Experience™ and Frey’s F-Experience®
retail park.
¹Source: INSEE, INSEE Focus No. 34, September 2015 / ²Source: Gira Conseil.
EXAMPLES OF EXPANDING RETAILERS
Retailer Target
Burger King HS / SC / RP / T
Big Fernand HS / SC
Vapiano HS / SC
Bagelstein HS / SC
Bagel Corner HS / SC
Chipotle HS / SC
Prêt à Manger HS / SC / T
Maison Pradier HS / SC
Starbucks HS / SC / T
Memphis Coffee SC / RP
Costa Coffee HS / SC / T
Columbus Café & Co HS / SC / T
HS: high streets / SC: shopping centers / RP: retail parks / T: transit retail (stations,
airports, etc.).
RETAIL MARKETBEAT
France | Q3 2015

4. Retail Marketbeat France | 4
THE LETTINGS MARKET
THE HIGH-STREET MARKET
Retailer demand remains strong for locations on Paris's major
commercial thoroughfares. This is certainly the case for the beauty
and restaurant sectors, whose upmarket concepts continue to spread
throughout the city. In addition, fashion still brings in the largest
contingent of new international players. For example, the first French
boutique of the Italian chain Harmont & Blaine will open in October
on the Boulevard des Capucines, joining the ranks of Boulanger,
Tommy Hilfiger, and Montblanc, all of which have (or are slated to
have) sales points on that street.
Retailers continue to favor certain districts of Paris. Each in its way,
Rue Saint-Honoré and the Saint-Germain-des-Près neighborhood
remain vital to the Paris market. Saint-Germain-des-Près should
benefit from the Banimmo restructuring of the Marché Saint-Germain,
where Uniqlo and Nespresso will move in by the end of 2016. Le
Marais, however, continues to attract the most intense activity, as it
did in 2014. The Italian food chain Eataly has confirmed its arrival on
the scene, BHV continues to reposition itself, and designer
showrooms proliferate along with pop-ups (Kiabi) and the opening of
new single-brand stores (Faguo, Fusalp, Le Creuset, etc.). Le Marais
has become a testing ground for trends as it has moved upmarket.
Rue des Archives is now the home to projects and openings of luxury
(Valentino) and accessible luxury (Sandro) brands.
Retailer expansion and repositioning also explain the momentum of
high-street markets elsewhere in France. This is the case in Lyon,
where Michael Kors will open a 120 m² shop on Rue du Président
Édouard Herriot, and in several other French cities (Bordeaux,
Toulouse, etc.). Recent movements in these cities reflect the
opportunities created by retailers forced to restructure their network
or even to wind up their business. For example, the former Virgin
Megastores continue to attract other large retailers, such as Habitat
in Strasbourg, Tati in Rennes, and H&M in Marseille. Although the
supply of properties is generally limited on the principal high streets
of major cities, Marseille is an exception to the rule. France’s southern
capital has abundant supply that is sometimes difficult to absorb
because of the wait-and-see attitude of retailers.
PRIME RENTAL VALUES (€/M²/YEAR)
High streets (ZA rent) Q3 2014 Q3 2015
Paris | Champs-Élysées 18,000 18,000
Paris | Rue Saint-Honoré 11,000 12,000
Paris | Bd Saint-Germain 6 500 6,500
Paris | Bd Haussmann 8,000 8,000
Paris | Francs-Bourgeois 4,500 4,500
Bordeaux | Sainte-Catherine 2,200 2,200
Cannes | Croisette 8,000 8,000
Lille | Neuve/Béthune 2,000 2,000
Lyon | République 2,300 2,400
Marseille | Saint-Ferréol 1,800 1,800
Nice | Jean Médecin 2,200 2,200
Toulouse | Alsace-Lorraine 2,000 2,000
Shopping centers
Regional SC | Ile-de-France 2,000 2,000
Regional SC | Provinces 1,400 1,400
Retail parks
France 180 180
For us it became obvious that
we would have to be present
in [Le Marais]. It’s the perfect
mix of local Parisians and
tourists with taste for fashion.
David Kang, managing director of the Tom Greyhound concept store,
in “The Business of Fashion”, March 2, 2014.
Source: Cushman & Wakefield.
RETAIL MARKETBEAT
France | Q3 2015

5. Faubourg Saint-Honoré
16%
Rue Saint-
Honoré
16%
Avenue
Montaigne
12%
Saint-Germain-des-
Prés
11%
Vendôme/Paix
10%
George
V/François 1er
9%
Le Marais
6%
Champs-
Elysées
3%
Other
17%
GEOGRAPHIC DISTRIBUTION OF OPENINGS |
PARIS 2011-2015
FOCUS ON THE LUXURY MARKET
Boosted by a weaker euro and the growing numbers of certain
international tourists (Americans, Chinese), Paris is one of the main
beneficiaries of the growth of the luxury sector in Europe. Retail
projects are numerous and increasing. There are now 51 openings of
luxury shops planned for Paris in 2015, compared with 34 in 2014.
Creations of new boutiques account for 58% of all Paris openings
expected in 2015. This large proportion reflects the strength of a
market that is constantly renewed by the arrival of international
retailers (Tory Burch on Rue Saint-Honoré), the revival of historic
brands (Vionnet on Rue François 1er, Paco Rabanne on Rue Cambon),
and the appearance of the first single-brand stores by lesser-known
retailers (Perrin on Rue d’Alger). However, the major players are not
remaining idle. Projects by LVMH, Kering, Richemont, and Chanel will
account for one-third of all luxury-shop openings this year in Paris.
Several of those projects are for new sales points that highlight the
desire of certain groups to accelerate the growth of designer brands
(Kering with Alexander McQueen on Rue Saint-Honoré) or to target
consumers and products showing strong potential (LVMH with Dior
Homme on Rue François 1er and Dior Parfums on Rue Saint-Honoré).
In Paris, as in all major mature markets, large luxury groups give
priority to consolidating their positions and to optimizing their
networks, often by refurbishing flagships (Saint-Laurent on Rue du
Faubourg Saint-Honoré) and by relocating shops. For example,
Richemont Group’s Montblanc will move into the former Eden Park
shop at 12 Boulevard des Capucines, after vacating 7 Rue de la Paix
for Piaget. Following on the heels of shop openings for Bucherer,
Cartier, TAG Heuer, and Omega on Boulevard des Capucines, the
Montblanc deal confirms the spillover of the Paris luxury market
outside its traditional boundaries. This trend will be further
accentuated by operations under way in Le Marais and regulatory
changes for store hours on Sundays. The finalization of large projects,
such as the Samaritaine—for which the Council of State has just
awarded a definitive building permit—and the redevelopment
announced for the Louvre des Antiquaires, also sets the groundwork
for an eventual uninterrupted path linking the historic luxury center to
new luxury poles on both sides of the Seine.
Retail Marketbeat France | 5
Source: Cushman & Wakefield.
RETAIL MARKETBEAT
France | Q3 2015

6. Retail Marketbeat France | 6
THE LETTINGS MARKET
SHOPPING CENTERS
The shopping-centers market has benefited from the expansion of
numerous international retailers, which prefer the largest centers or
best-performing sites as well as extension projects for well-known
sites (Primark in Polygone Riviera, Lego in Les Halles, etc.). The best
sites are also sought after by retailers traditionally established in high
streets, in both fashion (Claudie Pierlot in Cap 3000) and food (Big
Fernand in Val d’Europe and Les Docks). Formats other than jumbo
are also performing well, thereby illustrating the importance to
retailers of opening in shopping centers and building networks in
smaller cities. However, as seen in the CNCC (Conseil National des
Centres Commerciaux, or French Council of Shopping Centers)
footfall index, visitor numbers at many shopping centers are
unsatisfactory. Competition from retail parks and retailer relocations
have hurt many shopping centers, while an increasing number of
shopping center tenants are downsizing space in order to reduce
costs. With traditional business drivers struggling and certain
shopping-center formats running out of steam, property-investment
companies such as Carmila are investing more and upgrading their
properties.
RETAIL PARKS
The retail park market has been lively in recent months. The handover
of numerous La Halle stores has provided good locations to several
retailers and allowed them to expand at the outskirts of towns. Dutch
discounter Action continues to open new locations, while other
discount and clearance stores pursue expansion (Stockomani in
Cormeilles-en-Parisis) or launch their development in France
(Kruidvat). The release of several La Halle stores has created
opportunities for C&A to develop on the outskirts—peripheral zones
that remain terra incognita for the retailer. Other fashion retailers
usually found on high streets and shopping centers (H&M, Happy
Chic, etc.) are also testing this format, which offers the advantages of
accessibility, relatively low expenses, and flexible space. New retail
parks provide major retailers with larger stores, where they can
display their entire product range and offer customers additional
services (Intersport, Cultura). The result is an increasing number of
moves from one retail zone to another.
FOOTFALL INDEX FOR SHOPPING CENTERS
My Valley | Cormeilles-en-Parisis (95)
Source: CNCC / Data from a panel of 151 shopping centers.
RETAIL MARKETBEAT
France | Q3 2015

7. 54%
17%
10%
6%
4%
4%
4%
1%
France China Germany
US Belgium UK
Switzerland Netherlands
1,9
2,3
4,8
1,2
1,9
3,6
3,3
3,6
4,0
7,7
3,0
0%
20%
40%
60%
80%
100%
0
1
2
3
4
5
6
7
8
9
Retail investment (bn €) Share of total investment (%)
RETAIL INVESTMENT ACTIVITY IN FRANCE NATIONALITY OF INVESTORS
Retail Marketbeat France | 7
THE INVESTMENT MARKET
The retail market accounts for 20% of the French commercial-property market, in which €3 billion has been invested
since the beginning of 2015. The sharp decline in investment (−39% year on year) is due to the scarcity of very large
deals. A highlight of the 3rd quarter was the sale of the Celsius portfolio, which contains eight French shopping centers
sold by CBRE Global Investors to a joint venture formed by the CIC (Chinese sovereign-wealth fund) and AEW Europe
for more than €500 million. This deal illustrates the constant arrival of newcomers to the French market and partly
explains the rise in foreign investment. International investors have been especially active in very large transactions
(> €200 million), but in smaller deals too. Since January 2015, foreign investors have committed €1.4 billion (+26% year
on year).
The finalization of the Celsius portfolio sale, Hammerson’s recent disposal of a stake in two shopping centers (Bercy 2
in Charenton-le-Pont and Grand Maine in Angers), and Primonial Reim’s acquisition of an Immochan portfolio have all
increased the share of malls and shopping centers in the retail sector. Although the number of deals remains low
(15 out of 77 transactions), shopping centers have accounted for 60% of total retail investment since the beginning of
2015.
High streets in Paris remain highly desirable, as seen in the finalization of Thor Equities' acquisition of Queen on the
Champs-Élysées and in other deals in the luxury sector. La Française recently acquired from Acanthe Développement a
mixed-use building at 17 Rue François 1er (8th district), in which Brunello Cucinelli recently opened its third Paris
boutique. However, insufficient supply of this class of property, combined with strong investor demand, places
downward pressure on yields, which have reached historic lows of between 3.00% and 3.50% for Paris’s best locations.
Investment in retail parks remains limited, at only €390 million. Retail parks also suffer from a scarcity of prime
opportunities.
*Total investment in French retail in 2015 (end of Q3).Source: Cushman & Wakefield.
RETAIL MARKETBEAT
France | Q3 2015

8. EXAMPLES OF OPENINGS IN 2015
Shopping centers M²
Polygone Riviera | Cagnes-sur-Mer (06) 74,000
Les Saisons de Meaux | Meaux (77) 30,000
Le Jeu de Paume | Beauvais (60) 24,000
Promenade Ste-Catherine | Bordeaux (33) 20,000
Les Docks | Marseille (13) 17,000
Les Passages Pasteur | Besançon (29) 14,700
Avaricum | Bourges (18) 11,100
Retail parks M²
Toulouse Fenouillet | Fenouillet (31) 33,500
Sens Sud | Sens (89) 28,300
SuperGreen | Terville (57) 28,000
Enox | Gennevilliers (92) 26,700
St-Max Avenue | Saint-Maximin (60) 17,300
Retail Marketbeat France | 8
FRENCH RETAIL PROPERTY STOCK
After St-Max Avenue at the beginning of the year, then Toulouse-
Fenouillet and Enox in the second quarter, recent months have seen
the opening of some of the highest-profile retail park projects
planned for 2015. For example, Supergreen, opened in September
near Thionville, is another of the many “green centers” developed by
Frey (O’Green near Agen and Be Green near Troyes in 2013 are the
most recent). This HQETM certified (French environmental standards)
retail park is home to 35 retailers, including several mainstays of
peripheral markets that are relentlessly expanding their networks
(Intersport, Orchestra, Stockomani, etc.). A new concept, Dock 39,
has opened its second French location at Supergreen, after Le Clos
du Chêne in Seine-et-Marne, and illustrates the importance of
recreation in next-generation retail parks.
Though retail parks were opened earlier in 2015, the highest-profile
shopping centers will not be opened until the 4th quarter of 2015
(Polygone Riviera near Nice, Les Saisons de Meaux, Le Jeu de Paume
in Beauvais, etc.). Most of these openings will be creations, which
account for 77% of all shopping center openings planned for 2015, a
level unmatched over the past decade. However, in 2016 the
proportion of creations is expected to decline significantly, to levels
last seen between 2012 and 2014 (47% on average). Extension and
redevelopment operations will dominate future projects, confirming
the trend of renewing existing French shopping centers.
This change also confirms the conclusions of a recent study by IAU-
IDF,¹ which analyzes the total land area of authorized CDAC
(Commission Départementale d’Aménagement Commercial, or
Departmental Retail Development Commission) operations in the
Paris region. Contrary to common belief, “The growth of retail supply
is due three-quarters to urban recycling, mainly the reallocation of
space already used for retail.” Such statements lend hope for the
reconversion of derelict retail space. The transformation of retail
supply also involves the reclassification of space and real estate that
has been allocated to other uses. Some of the principal openings
planned for the last part of 2015 (Promenade Sainte-Catherine in
Bordeaux, Les Docks in Marseille) thus illustrate the importance of
retail as a driving force for the revival of urban space.
¹Source: IAU-IDF, “Methods for retail development,” 2015.
OPENINGS OF SHOPPING CENTERS
CREATIONS AS SHARE OF TOTAL VOLUME
2015
Average 2012-2014
77 %
47 %
Source: Cushman & Wakefield/In blue: shopping centres already open.
Source: Cushman & Wakefield.
RETAIL MARKETBEAT
France | Q3 2015

9. REGULATORY NEWS
Although the question of extended retail hours in France has not yet
been fully answered, the past few months have seen real progress in
addressing one of the principal concerns of retailers for many years.
Parliament’s definitive adoption of the Macron Law in early July 2015,
made possible only by enforcement of Article 49/3, increases the
number of Sunday openings allowed by municipalities from 5 to 12
per year (granted by the Prefecture in Paris). With more shopping
hours authorized as early as the end of 2015, the law is welcomed by
some retailers and retail sites as the holiday period approaches.
The other significant change is the possibility given to retailers
located in “international tourist zones” (ITZ) to open on Sundays and
every night until midnight. The law will affect several Paris
neighborhoods, as defined in several orders published in the Official
Gazette of 26 September 2015, as well as the towns of Deauville,
Cannes, and Nice. Although businesses must now negotiate
agreements, provisions may also be defined in accordance with
branches or territories. In addition, “Sunday rest” may now be
interrupted (though not up to midnight) for the major train stations in
Paris and six stations elsewhere in France (Lyon Part-Dieu, Marseille
Saint-Charles, Bordeaux Saint-Jean, Montpellier Saint-Roch, Nice-Ville,
and Avignon TGV).
INTERNATIONAL TOURIST ZONES IN PARIS
CRITERIA DEFINING AN ITZ
Order no. 2015-1173 of 23 September 2015
Such zones must:
- have international scope because of an
internationally renowned offer in commercial,
cultural, heritage, or leisure terms;
- be easily reached by a transport
infrastructure of national or international
importance;
- attract a large number of tourists from
outside France among their clientele;
- enjoy significant purchases by tourists
from outside France, as measured by the
amount of purchases or their share of the
zone’s total revenues.
RETAIL MARKETBEAT
France | Q3 2015
Retail Marketbeat France | 9

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CONTACTS
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Managing Director – Retail services
Cushman & Wakefield France
christian.dubois@eur.cushwake.com
David Bourla
Head of Research
Cushman & Wakefield France
david.bourla@eur.cushwake.com
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