European retail parks & shopping centres see resurgence

After a period of significant challenges, European retail parks and shopping centres are experiencing a notable comeback. 

Expected return for retail sectors - AEW

According to research by AEW, this recovery is underpinned by positive macroeconomic trends, including projected annual retail sales growth of 1.5% in the Eurozone between 2026 and 2030.
Retail vacancy rates, which peaked during the pandemic, have now moderated across various sub-sectors. By Q2 2025, shopping centre vacancy is projected to stabilise at 6%, while high street retail and retail parks are both expected to sit at 4%. This is a significant improvement from 2024 levels, where some regions saw averages as high as 9%.
This reduction in vacancies is driving positive rental growth forecasts for the 2026-2030 period. Retail parks are leading the sector with 2.7% projected annual growth (up from 2.2% in the previous five years). High street retail follows with 1.6%, ahead of shopping centres with 1.2%.
While shopping centre vacancies have stabilised, they remain higher than in other segments as national retailers continue to optimise their physical footprints. In contrast, supermarkets maintain a near 0% vacancy, largely due to the prevalence of the sale-leaseback model.
In 2025, retail’s share of European transaction volumes increased to 16%, partially reversing a decade-long decline. This rebound was driven by a repricing that made retail assets more attractive compared to other core sectors.
Looking ahead to 2026-2030, retail parks are projected to offer the highest annual returns at 9.2%, outperforming non-retail sectors (8.7%). Shopping centres follow closely at 8.6%, with high street retail at 7.3%. Furthermore, shopping centres and retail parks offer higher current income yields (6.4% and 6.0% respectively) than non-retail alternatives (5.0%).
Prime retail yields are expected to tighten by 2030 as interest rates are cut and inflation eases. Yields for shopping centres are projected to tighten by 30bps, high street by 20bps, and retail parks by 10bps.
Spain has emerged as a primary target for investors. Spanish shopping centres currently rank highest for risk-adjusted returns across all European country-sector segments, with Spanish high street retail also featuring in the top ten. 
Shopping centres in Germany and Italy feature in the top five for risk-adjusted returns. Barcelona, Madrid, Munich, Stockholm, and Milan are showing the most positive excess spreads for shopping centre investments.
Despite this broad recovery, a "bifurcation" is expected to persist, with a widening gap in performance between prime assets and secondary retail locations.