Retail in Europe: Investment in retail premises declines in third quarter, but fundamentals are sound

Investment in retail premises in Europe came to €28.9 billion ($31.6 billion) year-on-year, down 41 percent compared to third quarter 2022 on a rolling-year basis, according to BNP Paribas Real Estate.

“The last 12 months have seen investment being rebalanced between the different commercial real estate categories. This kind of shift hasn’t been seen in Europe for many years, and retail in particular is benefiting,” said Patrick Delcol, head of Pan-European coverage of retail, logistics and hotels for BNP Paribas Real Estate. Indeed, the sector is gaining market share in relative terms, rising from 15 percent to 19 percent of overall investment between third quarter 2022 and third quarter 2023, while offices have slipped from 37 percent to 31 percent and logistics from 24 percent to 20 percent. Even though the broader context is still challenging, retail is once again the second most popular asset category in Germany and France for the first time since 2018.