The retail real estate sector includes buying, selling, managing, and leasing of various types of retail properties, such as grocery stores, supermarkets, convenience stores, retail parks, power centers, high street retail stores, shopping centers, and malls. While a relatively small share of the
, retail real estate is crucial to the functioning of any city or town. With the coronavirus (COVID-19) pandemic still raising havoc across Europe, the retail sector continues suffering reduced footfall and consumer spending. Naturally, this unprecedented situation has affected the investment market, leading to
Which are the largest retail real estate investment markets in Europe?
Germany, the United Kingdom (UK), and France are
Europe’s largest retail real estate investment markets. In 2020, investment activity slowed down across almost all markets, except for the UK, Spain, Austria, Switzerland, and Spain. Indeed, according to investors, the retail real estate market will remain the least favorable in terms of
investment prospects in 2022. A survey among EMEA investors found that 12 percent
wanted to invest in the sector and that grocery shops, supermarkets, and convenience stores were the most popular property type. This is likely because these retailers were much less affected by the pandemic compared to high street retail. Investment attitudes also vary depending on their risk and return characteristics. Approximately
50 percent of potential investors were interested in core strategies, which are the most conservative type of investment and rely on stable income with low risk, whereas only seven percent were seeking development opportunities.
How much does it cost to rent high street or shopping center space in different European markets?
Renting space in a shopping center was
most expensive in Frankfurt at 280 euros per square meter per month, followed by London and Dusseldorf at 209 and 180 euros in 2021. High street retail refers to retail properties located on the main streets of cities and unsurprisingly, popular
luxury shopping destinations like Paris, London, and Milan have the priciest rents. Forecast figures show that rental
growth will remain modest in the coming years, with Milan, Rome, Helsinki, and Berlin expecting annual growth of between one and 1.6 percent. As the coronavirus pandemic continues disrupting international travel, Paris and London, are forecasted to see a decline of 2.71 and 1.1 percent per year.
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