Europe sees investment surge in factory outlet centres

Savills reports that investment in European Factory Outlet Centers (FOCs) surged to €653 mln in the first half of 2025. 

Destination for expansion of brands

This figure represents 3.2% of total retail investment, significantly exceeding the 10-year average of 1.8%. Year-to-date FOC investment as of August 2025 has surpassed €1 bn, indicating a strong market for the second half of the year.
Demand from brands for outlet space is also on the rise. Since July 2023, 588 new outlet stores have opened in Europe, according to Ken Gunn Consulting. Rituals is leading the expansion with 14 new locations, followed by Jack & Jones (12), Under Armour and Swarovski (10 each), and Skechers (9). The most prominent occupiers remain Levi’s, Guess, adidas, Puma, and Tommy Hilfiger. Brands are planning further expansion, with an average of 2.7 outlet stores planned per brand in 2025, up from 2.4 the previous year.
A survey from Ecostra indicates that Germany is the most attractive European country for FOC expansion, with 35% of brands planning to expand there in the next three years. This is followed by Spain (32%), France (27%), the UK (27%), Austria (16%), and Poland (16%).
Chris Nichols, European Research analyst at Savills, commented: “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, said: “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 twelve months, reflective of heightened investor interest.”