Retail property investment in Europe increases by 16% in 2025, says Savills

Property investment in Europe’s retail sector has risen 16% year on year in terms of total transaction volume, surpassing 24.6 billion euros so far this year, according to Savills.

This figure places activity 3% above the average for the past five years (for the period from the first to the third quarter).

The firm notes that the retail resurgence is spreading ‘across the board’ across the continent. Shopping centres have regained prominence, accounting for 30% of total investment volume since the start of the year, compared with 26% in the same period in 2024. This increase is primarily due to a higher number of large-scale transactions and the return of institutional capital to these assets.

According to Savills, the fundamentals of the European retail market are improving ‘steadily’. Vacancy rates continue to fall, rental growth is gaining traction again, and the limited supply of new development is bolstering income prospects for investors. ‘This more favourable environment is bringing larger portfolios and assets to market, broadening the buyer base and invigorating transactions,’ it adds.

Over the coming months, the firm expects improving macroeconomic conditions and the strength of the retail occupier market to continue to drive investor demand. It believes yield compression will remain gradual, with retail parks and high street assets leading the way.

‘Prime’ shopping centres will also benefit from growing institutional interest in large investment volumes, which will support liquidity and a slow but steady reduction in yields,’ it adds.

Savills also highlights a strong rebound in cross-border retail activity in major European cities, with US brands leading international expansion. Although European brands continue to dominate regionally (accounting for 56% of new openings), US retailers now account for 25% of all new store openings in Europe, up from 14% the previous year.

This trend, the firm says, is being driven by macroeconomic and geopolitical factors: trade tensions and moderating consumer confidence in the US have led many companies to accelerate their growth strategies in Europe, reinforced by the EU-US trade agreement signed in July.

Finally, the company explains that Canadian retailers are also increasing their presence in Europe, accounting for 4% of new international entrants, while Chinese brands are diversifying into cities such as Berlin, Amsterdam, and Zurich to reduce their dependence on the domestic market.