SavillsIM Logo

Equity

Debt

Natural Capital

Contact Us

Global Equity

Industrial & Logistics Living Office Retail Asset Management

Regional Teams

Latest News

Global Debt

Senior Core Whole Loan High Yield

Regional Teams

Latest News

Natural Capital Platform

Farmland Forestry Nature-Based Solutions

Team

Latest News

Back to menu

Global Equity

Industrial & Logistics Living Office Retail Asset Management

Regional Teams

Back to menu

Global Debt

Senior Core Whole Loan High Yield

Regional Teams

Back to menu

Natural Capital Platform

Farmland Forestry Nature-Based Solutions

Team

Important Information

1. IMPORTANT INFORMATION

This website is operated by Savills IM Holdings Ltd and its subsidiary undertakings, including Savills Investment Management LLP, a limited liability partnership authorised and regulated by the Financial Conduct Authority (“FCA”) (Firm Reference Number: 615368) in the United Kingdom to carry out certain investment and insurance distribution activities and DRC Savills Investment Management LLP, a limited liability partnership authorised and regulated by the FCA (Firm Reference Number: 574874) in the United Kingdom to carry out certain investment distribution activities.  The registered office for both entities is 33 Margaret Street, London W1G 0JD. The information on this website may refer to either or both of these entities along with the wholly owned subsidiaries of each, as listed on the Regulation page of this website, together (“the Savills Investment Management Group”, “we”, “us” and “our”). Property is not a financial Instrument as defined by Directive 2014/65/EU (“EU MiFID II“), and as it forms part of UK law by virtue of the European Union (Withdrawal) Act 2018, (“UK MiFID II“). Consequently, the direct investment into, and management of, property is not regulated by the FCA.

These terms and conditions govern your access and use of this website. By accessing this website, you are indicating that you have read and accepted these terms and conditions, along with any terms expressly incorporated by reference.

2. TARGET AUDIENCE

The content contained within this website has been prepared for institutional investors only, and by having accepted the terms when entering the site, you therefore confirm that you acknowledge this. For persons accessing the website from the EEA, or who are otherwise domiciled or with a registered office in the EEA, this means that you are confirming that you meet the criteria to be a “professional client” in accordance with Article 4(1)(10) of MiFID II. For persons accessing the website from the UK, or who are otherwise domiciled or with a registered office in the UK, this means that you are confirming that you meet the criteria to be a “professional client” in accordance with UK MiFID II, or you are someone who may lawfully access this website.

Information contained within this website should not be forwarded or communicated to any other investor type. The dissemination of the information contained on this website is only intended for institutional investors in countries where Savills Investment Management LLP, DRC Savills Investment Management LLP, or any other relevant Savills undertaking (as appropriate) may make such material available. This information is not intended to be accessed by investors in jurisdictions where there is no such permission to do so. Users in such geographies should not access or act upon information contained on this website.  The information contained here should not be regarded as an offer to purchase investment units.

In the UK, to the extent information contained on this website constitutes a financial or a scheme promotion for the purpose of s. 21 of the Financial Services and Markets Act 2000 (“FSMA“), this website may only be accessed by (i) “investment professionals” falling within Article 14(5) of the FSMA (Promotion of Collective Investment Schemes) (Exemptions) Order 2001 (“PCIS Order“) who have professional experience in matters related to investments; (ii) persons falling within any of the categories (a) to (a) of Article 22(2) of the PCIS Order (broadly, companies with net assets of £5 million sterling or more and trustees of trusts with assets of £10 million sterling or more, or any person acting in the capacity as director, officer or employee of such an entity where that person’s responsibilities when acting in that capacity involve him in the entity’s engaging in investment activity); or (iii) any other person to whom it may otherwise lawfully be communicated.

We reserve the right to prohibit or restrict access to or use of this website by any person or in any jurisdiction.

3. NO OFFER, ADVICE OR RECOMMENDATION

Nothing on the following pages shall be regarded or taken as financial advice. Access to the website is provided on the condition that it is for institutional investors to receive such information only and does not constitute an offer to enter into any contract or agreement, nor is it a solicitation of an offer to buy or sell investments in any jurisdiction.

4. RISK WARNING TO ALL POTENTIAL INVESTORS

Please remember that past performance is not necessarily a guide to future performance, and no representation or warranty is made regarding future performance. The value of an investment and the income from it can fall as well as rise as a result of market and currency fluctuations and investors may not get back the amount originally invested. Tax assumptions may change if the law changes, and independent advice should be sought. Property or, where appropriate, debt secured on Properties can be difficult to sell, and it may be difficult to realise your investment when you want to.

5. OTHER COUNTRIES

The information described within this website is not available in all countries, and nothing contained on this website constitutes an offer or solicitation to anyone in any jurisdiction where such an offer is not lawful or to anyone to whom it is unlawful to make such an offer or solicitation. By using this website you consent to these terms and conditions and confirm that you are aware of the laws in your own jurisdiction relating to the provision and sale of funds and any related financial services products, services or advice.

6. DISCLAIMER

Whilst reasonable care is taken to ensure that information contained on this website is accurate, we do not guarantee its accuracy, adequacy or completeness. We reserve the right to change the information on this website (including these terms and conditions) at any time without notice. You must check these terms and conditions for changes each time you intend to use this website. Your use of this website following such amendments constitutes your acceptance of these terms and conditions as amended.

We provide this website on an “as is” basis and make no representations or warranties of any kind with respect to this website or the content contained on it (including any text, graphics, advertisements, links or other items) and disclaim all such representations and warranties. In addition, neither we nor any other contributor to this website make any representation or give any warranty, condition, undertaking or term either express or implied as to the condition, quality, performance, accuracy, suitability, fitness for purpose, completeness, or freedom from viruses of the content contained on this website or that such content will be accurate, up-to-date, uninterrupted or error free.

7. LIABILITY AND INDEMNITY

YOU ACKNOWLEDGE THAT YOU ARE SOLELY RESPONSIBLE FOR THE USE TO WHICH YOU PUT THIS WEBSITE AND ALL THE RESULTS AND INFORMATION YOU OBTAIN FROM IT AND THAT ALL WARRANTIES, CONDITIONS, UNDERTAKINGS, REPRESENTATIONS AND TERMS WHICH MAY APPLY TO YOU, THIS WEBSITE OR ANY CONTENT ON IT, WHETHER EXPRESSED OR IMPLIED, STATUTORY OR OTHERWISE ARE HEREBY EXCLUDED TO THE FULLEST EXTENT PERMITTED BY LAW.

Nothing in these terms and conditions shall restrict or exclude any liability that we have to any party that cannot be excluded or restricted as a matter of applicable law, including for death or personal injury arising out of our negligence or for fraudulent misrepresentation. We and all contributors to this website hereby disclaim to the fullest extent permitted by law all liability for any loss or damage including any consequential or indirect loss or damage incurred by you, whether arising in tort, contract or otherwise, and arising out of or in relation to or in connection with: (i) your access to or use of or inability to use this website or the content made available on this website; or (ii) use of, or reliance on, any content made available via this website whether or not the circumstances giving rise to such cause may have been within our control, or of any vendor providing software or services support. In particular, we shall not be liable for any indirect, incidental or consequential loss or damage.

You shall indemnify us from and against all actions, claims, proceedings, costs and damages (including any damages or compensation paid by us on the advice of our legal advisors to compromise or settle any claim) and all legal costs or expenses arising out of your use of this website and any breach by you of these terms and conditions.

8. INTELLECTUAL PROPERTY RIGHTS

We are the owner or the licensee of all intellectual property rights in this website and in the material published or otherwise made available on it. These works are protected by intellectual property rights, including copyright laws. All such rights are reserved.

You may not make a permanent copy of or reproduce this website or any of its contents in any form. You may not reproduce or incorporate this website or any of its contents into any other website. You may only print or cache temporary copies of the content for your own personal non-commercial use.

We welcome links to this website from relevant third party websites. However, if requested in writing by us, links must be removed within 24 hours.

“Savills Investment Management” and “DRC Savills Investment Management” and the corresponding logos are trademarks registered in our names in the UK and other parts of the world. Reproduction of these trademarks other than in order to view this website is prohibited. Nothing on this website should be construed as granting any licence or rights to use or distribute any site content without our express written agreement.

9. SITE ACCESS, INTERRUPTIONS AND OMISSIONS IN THIS SERVICE

We reserve the right to suspend, withdraw, restrict or amend all or any part of the service provided by this website at any time without notice or liability to you. We do not accept responsibility as to the operation, functionality or availability of this website, or warrant that the use of this website will be free from delay, interruption, interception or error.

Whilst we take every care to ensure that the standard of this website remains high and to maintain the continuity of it, the internet is not always a stable medium and errors, omissions, interruptions of service and delays may occur at any time, often due to factors outside of our control. As a result, we do not accept any ongoing obligation or responsibility to operate this website (or any particular part of it).

You must not violate the security of this website or attempt to do so. You must not attempt to gain unauthorised access to this website, the server on which this website is stored or any server, computer or database connected to this website.

You may not do anything that could interfere with the functioning of this website, restrict or inhibit others from accessing or using it, or result in the transmission of a denial-of-service attack, distributed denial-of-service attack, virus, worm, time bomb, logic bomb, Trojan horse or other harmful material.

You must not use this website in any way that causes, or may cause damage to us, this website or this website’s availability or accessibility. In addition, you must not use this website in any way which is unlawful, illegal, fraudulent or harmful or in connection with any unlawful, illegal, fraudulent or harmful purpose or activity or to transmit or send unsolicited commercial communications.

We will take reasonable precautions to ensure the security of this website. However, please note that the transmission of information via the internet is not completely secure.

We will not be liable for any loss or damage caused by a denial-of-service attack, viruses or other technologically harmful material that may infect your computer equipment, computer programs, data or other material due to your use of this website or to your downloading of any material posted on it, or on any website linked to it. 

10. TERMINATION

We have the right to terminate your access to this website at any time and in any event if you commit any breach of these terms and conditions. We shall have no liability to you for such termination. In the event that your access to this website is terminated, the remaining provisions of these terms and conditions will continue to apply.

11. INVALIDITY

If any part of our terms and conditions is found invalid or unenforceable (including any provision in which we exclude our liability to you), that provision shall be enforced to the maximum extent possible and the enforceability of any other part of these terms and conditions will not be affected.

12. LINKS

This website may contain links to third party websites over which we have no control.  We assume no responsibility for the content of third-party websites or resources and accept no responsibility  for any losses which may arise to you from your use of them. The presence of a link to a third party does not necessarily mean that we endorse that site or have any association with the proprietor of that website. These third-party websites will have their own terms and conditions of use, and your use of them and your relationship with their owners and/or operators will be governed by such terms and conditions.

13. GOVERNING LAW AND JURISDICTION

The terms and conditions  and all matters arising in connection therewith shall be governed exclusively by English law except for the information provided by: (i) Savills Investment Management SGR S.p.A. which is governed by Italian law; and (ii) Savills Investment Management Asia Ltd (Japan branch) which is governed by Japanese law.

The English courts will have the exclusive jurisdiction over any matters arising from or related to these terms and conditions and this website except that: [All disputes relevant to the  information provided by Savills Investment Management Asia Ltd (Japan branch)  shall be subject to the exclusive jurisdiction of Tokyo District Court as court of first instance.]

14. DATA PROTECTION

These terms and conditions should be read in conjunction with our Privacy and Cookies Policy, which provides details of the basis upon which we process any personal data that we collect from you, or that you provide to us, including via this website.

 

Accept Accept
Article

Investors are Returning to the Shops

Published 16th December 2025

Author:

Ian Jones

Ian Jones

Investment Director

Share this article

Summary

  • European retail is regaining investor attention due to tighter supply, stronger consumer spending, and attractive yields.
  • Rents have reset, making spaces more affordable and leasing more sustainable.
  • Consumer spending in Europe is forecast to grow faster than the long-term average, supporting retail momentum.
  • Retail delivered strong returns in 2025, especially in retail parks, outperforming offices and residential.
  • New retail development is minimal, so retailers must adapt existing spaces to modern needs.
  • Retail parks, prime high streets, and food retail offer the most attractive opportunities, each with unique drivers.
  • Online shopping is growing, but most retail spend remains in-store, with retailers integrating both channels.
  • Energy efficiency and social initiatives are increasingly important, with ESG seen as a marker of quality and stable income.

European retail is back on investors’ radar. Tighter supply, stronger consumer spending and attractive yields are creating opportunities – in particular across retail parks, high streets and food retail.

Savills IM’s Fund Director Ian Jones recently sat down with Financial Investigator to discuss the retail sector. For Financial Investigator’s full Private Market Special report please visit their website.

1. What is happening in the European retail sector?

There are a number of factors at play but in short, we see retail on more and more investors’ shopping lists.

The first point to make on retail’s resurgence is the changed European retail footprint (Chart 1). Over the past decade or so the sector has been reorganised to now present a tighter, more balanced market. Redundant space has been repurposed – many department stores and shopping centres have been reborn as mixed use office and residential schemes for example – while new development has largely evaporated.

Chart 1: Retail selling space per capita by country (sqm per person)

Sources: Euromonitor, Oxford Economics, Savills IM (Oct 2025)

We also see improved tenant affordability. The past few years have seen a general resetting of rents throughout the European retail landscape. These corrected rents have improved tenant affordability and in turn now underpin a more sustainable leasing environment for the future.

And on the consumer side the economic outlook for spending also looks stronger across the continent. Oxford Economics forecasts European consumer spending to grow by 1.7% per year over the next five years, outpacing the 2000–2024 average of 1.3%. Strong real wage growth should also continue to underpin demand and confidence, maintaining the sector’s momentum.

From a returns perspective, the numbers suggest that retail may be a bargain.  According to the MSCI European Quarterly Index, retail delivered total returns of 7.5% in the year to Q2 2025 – just shy of industrial (7.9%), and ahead of residential (7.0%) and offices (3.7%). Retail parks led the charge, generating returns close to 10%, driven by income yields above 6% – comfortably ahead of all-property averages and bond yields.

2. How easy is it for retailers to find quality space? 

One way to look at this is around supply constraints.

Take space under construction. New development activity in the retail space has been incredibly low since 2020 (Chart 2), and high construction and financing costs make a resurgence in new supply unlikely.

Chart 2: European retail completions & development expenditure*

Sources: PMA, MSCI, Savills IM (Oct 2025) | *2025 is an estimate

So with a lack of new space, retailers are obliged to look at what is available now, and generally speaking much of this needs adjustment to adequately serve the modern retailer – and the modern consumer. We’re talking about warehouse space, click and collect functionality, energy efficiency to help with overheads, space fit for experience-based retailing, and even electric vehicle charging.

These factors are putting pressure on retailers to find and secure the right space when its available.

3. Where do you see retail opportunities across Europe?

Obviously retail is heterogeneous and investors should take care to understand what opportunities are available across retail’s sub-sectors.

Retail Parks

We see more investors interested in retail park opportunities. Consumers continue to value the convenience of out-of-town shopping experiences, retail park space can be a key element to an omni-channel strategy and click-and-collect services, while embracing mixed-use elements – for example cafes, gyms and hospitality spots – can increase dwell time and footfall at site.

That said when it comes to retail parks, investors must consider the leasing profile, anchor tenant tenacity, retail offer mix, catchment and competition.

High Street

The truly prime high street is perhaps a little shorter than it was five years ago. Retailers have been through a period of evaluating their space needs and across Europe we typically see retailers having fewer stores in city centres or moving to high street areas with higher footfall.

Now top European high streets are seeing increasing footfall figures and rental growth. Couple this with the limited space for new development in these areas and we see fundamentals supporting resilient income.

And that’s why many investors are now revisiting the high street. Following this period of change and value adjustment, yields in certain pockets of prime high streets are looking appealing.

Food Retail

For food retail, brick-and-mortar space remains the clear number one sales channel. While online grocery sales are growing, retailer omni-channel strategies are still centered on physical stores.

Demand for space in the sector is robust with construction costs high and planning law generally restrictive – in Germany, France and the Netherlands for example. The longer leases available in the sector are particularly attractive to long-term investors, with typically CPI-linked agreements augmenting income from high quality covenants.

4. What’s next for the brick & mortar and e-commerce dynamic?

Online shopping will continue to grow but the vast majority of retail spend still happens in-store. The take-up of online shopping also varies across Europe.

The UK sees relatively high e-commerce sales as a proportion of all retail sales (roughly 27%) when compared to other European countries and the EU average (roughly 11%). European countries may move closer to the UK level over time, but physical retail has evolved to live alongside and actually compliment online shopping.

As we’ve discussed, retailers across Europe have generally shrunk their footprint over the past 10 years as they have sought to optimise their store networks amid increasing e-commerce usage. But not only are many retailers now leaner, they are more sophisticated in how they use e-commerce and brick-and-mortar together. Retailers are increasingly finding ways for the two channels to complement each other, rather than viewing e-commerce as a substitute to in-store.

5. What does ESG mean to the retail sector?

Retailers have seen their energy bills increase over the last few years and that has placed a real focus on a building’s energy efficiency and methods of reducing consumption. As is the general trend with ESG and real estate, it can often be a proxy for quality. A retail space that ‘does ESG well’ is likely to appeal to higher quality tenants and generate more stable income.

Aside from the obvious environmental considerations, social initiatives are intrinsically linked to retail real estate. Most sites employ locally and engage with the local community through events and giveback schemes. We see fantastic social initiatives taking place throughout our retail AuM with examples in Poland and the Netherlands.

And underpinning the ESG approach of retail real estate is the asset management strategy. High-quality retail assets do not stay high-quality unless there is an active asset management approach, and ESG is a core part of this.

Read More

Back to Insights Back to Insights