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Research - NOVEMBER 23, 2021

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AEW forecasts prime shopping centers become most attractive sector in 2022 European outlook

by Andrea Zander

Prime shopping centers are forecast to become the most attractive asset class in Europe due to the sector’s yield widening during the past two years, showing the best returns compared to other sectors, according to AEW. Significant repricing leaves shopping centers in a position where yield tightening of 30 basis points is projected for the next five years in AEW’s base case.

Prime shopping centers are projected to have the highest returns (7.4 percent per year) of any sector, due to their attractive current yields and projected tightening. Shopping center and high street retail yields have widened by more than 120 basis points and 50 basis points, respectively, since 2018. And due to this past repricing, their yields are forecast to tighten by 2026 by 30 basis points and 15 basis points, respectively.

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