Retail’s multiple challenges are pushing the sector towards a new model
European retail investment
In Q2 2020, the European retail investment volume amounted to €6.4 bn (–37% y-o-y). With a level just over half the 10-year average, this is unsurprisingly the lowest volume recorded since 2009. However, thanks to a very dynamic Q1 (+75% vs Q1 2019), the retail investment volume reached €18.8 bn in H1 2020 (+ 10% compared to H1 2019).
The European occupier market
The prime retail market in major cities of Europe is highly dependent on the luxury sector and the spending of international tourists, whose numbers plummeted during the lockdown. It may be slow to return if current travel restrictions persist.
A few adjustments in rental prices have already been recorded during the first half-year, especially in some high streets in London, Prague, Madrid and Barcelona. A greater downward pressure is expected in the coming months, while vacancies will increase.