Fashion retailer H&M is to extend its branch at the eastern end of London’s Oxford Street to create a 25,000 sq ft (2,325 sq m) flagship store.

H&M will extend into the unit next door to its 174 Oxford Street store, which houses temporary fashion shop Surprise Surprise at present. The retailer’s new annual rent bill is understood to be in excess of£2 million. H&M is expected to start work on site later this year to open its doors in early 2008.

The move follows the redevelopment of the entire building that houses H&M, UK House. Late last year, landlord Roche Properties took unconditional surrenders from the previous tenants that sat next door to H&M – JD Sports and Moss Bros – to create a 17,200 sq ft (1,600 sq m) flagship store, which was then let to Japanese fashion retailer Uniqlo.

Property agencies Thomas Davidson & Partners and Nash Bond acted for the landlord, while Cushman & Wakefield acted for H&M. Thomas Davidson partner Erol Ezen said: “The line-up at UK House 12 months ago was Moss Bros with about three years left on its lease, JD Sports with slightly longer, H&M with about eight years left and a temporary let to Surprise Surprise. Now we’ve got two 20-year leases and two fantastic tenants.”

Oxford Street’s east end has improved significantly over the past year. The JD Sports and Moss Bros units were on the market for some time until Roche Properties took the units back to create a flagship store. Opposite, Zara has taken a shop next door to its sister brand Bershka.

Major deals have also taken place at the west side of Oxford Circus. Shellys came out of its Oxford Circus spot and Italian lingerie retailer Tezenis is now fitting out; and Cecil Gee has surrendered its lease at 287 Oxford Street, where T-Mobile will take its place. Meanwhile, Waterstone’s has exited its former flagship site, where Uniqlo is now fitting out.

“In the face of continuing negative comment on the market in general, Oxford Street really is bucking the trend. There has been a deals frenzy on the street and this looks likely to continue, as there are several UK and international retailers seeking further representation or their first shops,” said Ezen.

UK House’s managing agent is Property Initiatives.

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