Prime shopping centre rents rise in Europe with Lisbon and Milan leading the way

Prime shopping centre rents across Europe have risen by an average 2% CAGR over the past three years, according to new research from Savills, with Lisbon and Milan leading growth at 8.1%. 

Larry Brennan, Savills

Both markets are supported by exceptionally low vacancy rates of 3.1% and 1.3%, and Savills expects conditions for further rental uplift to remain in place as rebasing and a constrained development pipeline limit new supply.

Savills forecasts European real retail sales to grow by 1.3% in 2026, led by CEE, the Nordics, the UK and Iberia. Spending patterns are fragmenting by age and affluence, but Europe’s demographic shift is becoming increasingly pronounced: by 2050, the median age is projected to reach 48.2, while the population aged 80 and over is expected to almost double.

This expanding older consumer base is set to reshape category performance, with drugstores and Health & Beauty expected to be among the strongest segments to 2030 at around 4% CAGR. Clothing and footwear (1%) and homeware (2%) are forecast to see more moderate growth following exceptional post‑pandemic performance.

Savills notes that these shifts will gradually reweight shopping centre floorspace towards health, pharmacy, services and everyday essentials. Chris Nichols, analyst, European research, said that while grocery will continue to anchor neighbourhood centres and fashion will remain essential, future acquisitive tenants are increasingly emerging from health, food and beverage (F&B), leisure and services segments aligned with convenience and experience‑led consumer behaviour.

Larry Brennan, Head of European retail agency, highlighted that portfolio rationalisation and the maturation of omnichannel retailing have materially improved shopping centre economics. Physical stores now contribute across sales, collection, returns and fulfilment, reducing occupier risk weighting and supported by stronger tenant credit profiles than a decade ago.

Shopping centres accounted for 34% of all European retail investment in H1 2026, their highest share since 2022. Yield compression has been led by Spain, tightening by 50 bps since Q4 2025, with Prague, Lisbon, Milan and London each moving in by 25 bps year‑on‑year.

James Burke, Director, Global Cross Border Investment, said capital is gravitating towards quality across Europe, whether in catchments, schemes or growth prospects. He noted renewed interest in convenience‑led schemes in the Netherlands, core capital targeting trophy assets in Sweden, and value‑add and opportunistic investors being most active in Germany.