In 2025, the European retail real estate sector is showing impressive momentum. The total volume of investment deals since the beginning of the year has increased by 16% year-on-year, surpassing €24.6 billion. These figures not only indicate a significant market revival, but also exceed the five-year average for this period by 3%. The renewed interest in retail is widespread, covering the entire continent.
The resurgence of shopping centers is particularly notable, as they have once again caught investors’ attention. Since the start of the year, they have accounted for 30% of total investment volume, compared to 26% in 2024. This growth is driven by an increase in major transactions and the return of institutional capital to the market, as investors once again see long-term growth potential in these assets.
The fundamentals of the European retail sector also inspire optimism. There is a steady decline in vacancy rates, reflecting strong demand from tenants. Rents are starting to rise again, and the limited supply of new properties is boosting return prospects for owners of existing real estate. This favorable environment is prompting the entry of larger assets and entire portfolios onto the market, widening the buyer base and making the sector more dynamic.
In the coming months, improvements in the macroeconomic situation and steady demand for retail space are expected to further fuel investor interest. Yields are forecast to continue a gradual decline (which means rising asset values), especially in retail parks and prime high-street stores. Top-tier shopping centers will also benefit from increased attention from major investment funds, contributing positively to market liquidity.
There has also been a surge in cross-border activity. International brands are moving aggressively into Europe’s main cities, with American companies leading the way. They now account for 25% of all new stores opened by foreign retailers in Europe, up from 14% last year. This trend is partly driven by internal economic factors in the US and a desire among companies to diversify their markets—an effort supported by the recent trade agreement between the EU and the US.
While European brands still dominate at the regional level, accounting for 56% of new openings, global competition is intensifying. Canadian retailers are also growing their presence, making up 4% of new international store openings. At the same time, Chinese brands are actively seeking new opportunities in cities such as Berlin, Amsterdam, and Zurich, aiming to reduce their reliance on their domestic market and strengthen their foothold in Europe.
