European retail investment declines for the fourth consecutive year, but renaissance era is now brewing

Retail investment in Europe, although it remains the second-largest sector by volume after offices, is experiencing another decline, with a €41 billion ($45 billion) investment volume, a drop of 25 percent over the past 12 months, reported BNP Paribas Real Estate.

“Retail investment in general is now offering an attractive premium vis-a-vis other asset classes, to a point which should reattract more and more investors’ attention over the coming months. This is partly due to some upwards shift of yields, but mainly due to the downwards shift of yields from the other sectors, such as offices and logistics,” said Patrick Delcol, head of pan-European retail at BNP Paribas Real Estate. Prime assets, though, kept stable yields, with the exception of the high street segment, where yield compression followed the office trend.

As for the fundamentals: European retail sales are forecast to remain at a good level in 2019 (2.4 percent) and over the following two years (2.0