Retail polarisation will intensify in the next five years

The divide between prime and secondary assets will widen, with demand, rental growth, and investment increasingly concentrated in top locations. Meanwhile, secondary assets will require repositioning, thereby improving the quality of the entire retail stock and eventually narrowing the prime-secondary gap in the long term.

Development pipeline to remain constrained

New retail construction will stay limited, with asset optimisation, refurbishment, and sustainability upgrades taking precedence over new builds.

Sustainability and resilience will take centre stage

Retailers and investors will prioritise sustainability, flexibility, and resilience in both assets and operations to navigate evolving consumer expectations and regulatory pressures.

Hybrid and omnichannel retail to become the norm

Retailers will further blur the lines between physical and digital, with hybrid formats, experiential concepts, and flexible store strategies gaining ground.

Europe to remain a key target for expanding international occupiers

Rising incomes, improving spend and the continent’s unrivalled tourist appeal means gateway cities will continue to appeal. The competitive occupier landscape in some of the biggest markets means smaller gateway markets will move up the agenda.

Value retail’s importance to grow further

Discounters and value-led formats will continue to perform strongly, as affordability becomes a lasting priority for the growing middle-class European consumer base.

Wealth transfer will influence domestic consumption

A significant transfer of wealth to older generations will boost demand for premium, wellness, and experience-driven retail, while also supporting younger family members’ aspirational consumption.

Urbanisation and tourism to fuel retail high streets

Retail activity will concentrate in major cities and tourist destinations, supported by strong international visitor flows and urban population growth.

Technology and automation will reshape operations

Advances in retail technology, automation, and data analytics will drive efficiency, enhance customer experience, and support new retail formats.

Retail investment momentum to continue but to remain selective

Capital will focus on prime assets, while secondary properties will attract value-add and repositioning strategies.

Retail yields set for gradual compression while staying competitive

Investor appetite will drive yield compression across Europe next year, led by retail warehouses and high-street assets, with prime shopping centres following. Retail will remain competitive, as yield compression in other asset classes is expected to be even more pronounced.

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