Italian fashion house Prada has paid $425 million to buy the building on Fifth Avenue in New York which currently hosts its store, the company said on Wednesday.

Prada, which has been leasing its five-storey store at 724 Fifth Avenue since 1997, said it had paid the price in cash using internal resources.

“The board believes that the property’s location offers high strategic value being characterised by increasing scarcity and long-term potential,” Prada said in its statement.

It added that the property, a 12-floor building in total, could also provide office premises and storage for the Hong-Kong listed company, in addition to its retail space.

New York’s Fifth Avenue is the world’s most expensive retail street, according to a global ranking from real estate services firm Cushman & Wakefield.

The wider Americas region has been a weak spot for Prada this year, with retail sales falling by 1.3 percent during the first nine months, contrasting with double digit growth in the Asia Pacific, Japan and European markets.

Reporting by Elisa Anzolin; Editing by Keith Weir

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