European retail investment volumes hit €19bn in the period Q1 to Q3 2024 – a 6% increase compared with the same period last year, according to the latest data from Savills.
Ireland (+107%), Italy (+83%), Hungary (+34%), the UK (+8%) and the Czech Republic (+1%) all significantly exceeded their five-year investment average.
Ireland’s performance was driven by the sale of The Square shopping centre for €130m as well as the trading of a few retail parks, and in Italy, Kering’s €1.3bn acquisition of Via Montenapoleone 8 in Milan boosted activity.
Retail parks accounted for 28% of total European retail investment volumes in Q1-Q3 2024, followed by shopping centres (26%) and high street retail (18%).
At the end of Q3, the European average prime retail warehouse yield stood at 5.9%, reflecting a 4 bps decrease year-on-year. Mass-market high street yields also compressed by 4 bps annually, reaching 5.2%.
Luxury high street yields remained stable at 4.4% compared with the previous year, while the European average prime shopping centre yield increased by 9 bps annually, and now stands at 6.3%.
James Burke, director, global cross border investment at Savills, said: “The really positive story across Europe is the increasing number of retail assets coming to market, generating strong investor interest. The availability of larger lot sizes and portfolios is broadening the pool of potential buyers, with institutional and cross border investors becoming increasingly active.
“Additionally, market fundamentals look promising: improved occupancy rates, a return to rental growth, and a lack of new development projects suggest that income returns should remain attractive in the near term.”
Lydia Brissy, director European research at Savills, added: “Based on deals signed since early October and those in the pipeline, we project Q4 retail investment volumes to reach approximately €8.5bn. This would bring 2024 year total numbers to just over €27.5bn, a 15% increase on 2023 volumes.”
