High street retail real estate prime yields in Europe 2024, by city
The prime yields for high street retail real estate in European cities were the lowest in Zurich (Bahnhofstrasse) at 2.75 percent as of the third quarter of 2024. Yield is a measure of profitability and shows the annual rental income as a share of the property price. As can be expected, cities with stronger economies tend to have lower initial yields, reflecting a lower risk and better prospects for rental growth. Sentiment among high street retail investors and developers has trended upward since 2021, after plummeting in response to the COVID-19 pandemic. Despite industry experts' optimism, retail real estate investment volumes stood at a record low in 2023. Furthermore, retail real estate companies traded at one of the highest discount to net asset value (NAV) in the European commercial real estate sector, suggesting concerns about the pricing of the underlying assets.
