Study: Center City Retail Rising
The Center City retail market has been on fire recently, with a young-yet-affluent customer base sparking more than $740 million in retail demand, according to a new report from the Center City District and Central Philadelphia Development Corp.
Thirty-three national retailers have opened locations in the area since 2013. With Walnut Street rents rising, Chestnut Street has been particularly vibrant with retailers like Bloomingdale’s Outlet, Old Navy, California Closets and Target Express all announcing that they’ll launch new locations there. They’ll join Uniqlo, Nordstrom Rack, Indochino, Five Below, Banana Republic Factory Outlet and Forever 21, all of whom opened within the last year. The Uniqlo, Five Below, and Old Navy stores are all flagship locations.
In fact, the market is so good that five retailers announced second locations in Center City: Aldo, Sweetgreen, Five Below, Old Navy and Target Express.
Here’s a closer look:
All the market movement helped drive retail rents up significantly. In fact, Center City rents have risen faster than any other city since 2008 except for Miami, according to CBRE research.
It’s no wonder why retailers are flocking to Center City. It’s got an affluent population with an average household income of $107,000 and 76 percent of residents holding at least a bachelor’s degree, according to the CCD report. Forty-seven percent of the population is made up of millennials.
Interestingly, much of the retail demand comes from overnight visitors rather than residents or people who work in the region. Here’s a breakdown of the demand dollars for Center City shoppers generate:
- Overnight visitors: $400,916,982
- Office workers: $180,764,024
- Other workers: $39,203,661
- Residents: $120,883,200
- Total: $741,767,867
Plus, there’s plenty of local flare: “Though national retailers have grown significantly over the last few years, Center City is differentiated from other retail districts by the diverse array of local proprietors that make up 78 percent of Center City’s tenant mix,” the report said.
What does the future hold? As the millennials turn into young parents, expect more children’s retailers to pop up.
“Center City’s large daily workforce and increasing residential population have also attracted a variety of service providers catering to their needs,” the report said. “However, given the recent increase in young families with children, there is a distinct opportunity for children’s retailers and child-oriented service providers to meet growing demand for children’s merchandise.”
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