Investment volumes for European factory outlet centres (FOCs) reached €653m in H1 2025, accounting for 3.2% of total retail investment, well above the 10-year average of 1.8%, according to the latest data from Savills.
Year-to-date volumes for FOCs exceeded €1bn as of August 2025, pointing to a buoyant investment market in H2.
According to Ecostra’s 2024 brand representative survey brands intend to open an average of 2.7 outlet stores in 2025, up from 2.4 the previous year, marking the first year-on-year increase since 2018.
In the same survey, brands were asked which countries offered the greatest potential for FOCs across Europe. Germany was the most popular destination, with 35% of brands interested in expanding there in the next three years, followed by Spain (32%), France (27%), the UK (27%), Austria and Poland (both 16%).
Chris Nichols, European research analyst at Savills, said: “A sustained retail recovery means that factory outlet centres are likely to capture a greater share of discretionary spending over time, as consumers return to leisure-led shopping. Their blend of value, luxury, and increasingly experience-driven environments continues to distinguish them from traditional retail and e-commerce, reinforcing their appeal to consumers.”
Larry Brennan, head of European retail agency at Savills, added: “Outlet operators are increasingly investing in experience as a key point of differentiation. Many are introducing pop-up activations, local brand collaborations, and modernising their schemes through refurbishment, sustainable design, and upgraded amenities. These enhancements are designed to drive footfall, encourage repeat visits, and appeal to younger, experience-led consumers.”
James Burke, director, Savills global cross border investment, said: “Despite their niche positioning, characterised by limited liquidity and intermittent deal flow, investor appetite for high-performing outlet assets remains robust. The primary constraint continues to be on the supply side, with few owners willing to divest successful schemes and a shallow pool of investible stock.
“Across European outlet centres, prime yields are estimated to be between 6-7%, typically 50–100 bps higher than shopping centres which currently average 6.15% across the region. We anticipate yields to slightly compress over the next 12 months, reflective of heightened investor interest.”
