According to the latest Savills Impacts report, global investment in retail assets is expected to increase. In several strategic locations, retailers are once again expanding their store networks, driving rental growth in key retail markets and, consequently, attracting renewed investor interest.

In Portugal, the outlook is particularly promising. Key indicators point to a year of strong momentum in both investment and occupancy. In the first quarter of 2025, the retail real estate investment volume reached €383.5 million, a figure significantly higher than that recorded in the same period of 2024. Retail remained the most attractive asset class, accounting for more than 50% of commercial real estate investment activity.

On the occupational market, demand remains high, especially in areas with the greatest foot traffic. Retail parks and shopping centres report very high occupancy levels, reflecting the vitality of these segments. In the high street retail segment, the main challenge continues to be the scarcity of supply, which, combined with consistent demand, keeps rents on an upward trajectory.

José Galvão, Head of Retail at Savills Portugal, comments: “Portugal offers unique retail development conditions in Europe. The increasing flow of tourists, the potential to expand retail parks (still small compared to other geographies), the consolidation of shopping centres, and the dynamism of commercial areas in major cities are key competitive advantages. Operators and investors view these strengths as opportunities amid a global context of great uncertainty.”

The Impacts report also highlights that, despite global challenges such as the growth of e-commerce, economic crises, the pandemic, climate change, and geopolitical instability, the anticipated widespread store closures did not materialise. While the sector remains complex, it shows signs of adaptation and resilience.

Oliver Salmon, Capital Markets, Savills World Research, notes: “Despite some lingering reservations, many investors are reassessing their approach to retail. In 2024, global investment in the sector remained stable, with a noticeable uptick in the second half of the year. Through several notable transactions, retail began to capture a growing share of institutional capital. Nonetheless, recovery will be gradual and will require careful asset selection.”

The study further points out that price corrections in retail assets have created new investment opportunities. Attractive yields make the sector competitive compared to other segments such as residential or logistics, which face increasing pressures on rental values and have more adjusted prices due to the volume of allocated capital.

Internationally, the retail sector shows diverse dynamics. In the Asia-Pacific region, countries such as Australia, Malaysia, and India saw increased investment, especially in regional shopping centres, while Japan stands out for sales growth driven by tourism. In the United States, the retail vacancy rate hit a historic low of 4.7%, with strong demand across various categories, although some brands are slowing expansion and considering Canada as an alternative. In Europe, the scarcity of new projects has boosted the value of existing assets, with a focus on premium shopping centres and retail parks, which continue to perform well.

Larry Brennan, Head of European Retail Agency at Savills, comments: “Despite the sector slowdown in Europe, prime assets remain in demand. Operators focus on prime locations, with sports, leisure, and value fashion segments leading occupancy in both high streets and urban centres. Retail parks remain particularly resilient, with limited supply and strong demand.”