Retail

In 2024, the investment volume in retail amounted to almost €1.2 billion, more than 12% higher than the previous year. Due to the aftermath of high interest rates and higher transfer tax, the number of transactions slowly picked up in 2024. A relatively large number of small transactions took place, resulting in a low average transaction price of around €5 million. The now falling ECB policy rate is leading to lower financing rates and initial yields. This will mainly affect larger transactions for which financing must be raised. Buyers and sellers will be able to find each other more and more in pricing. Moreover, investors and financiers are becoming increasingly confident in the upward movement of the market. CBRE therefore expects more large transactions in the coming year. The investment volume is expected to reach €1.4 billion in 2025.

Trends and developments

• Even though retail sales increased in 2024, this did not lead to better results for many retailers. This is because costs for purchasing, staff and rent went up as well. In addition, many businesses still have corona debts to repay. Partly because of this, there are more and more retailers and hospitality companies with problematic debts. Consequently, bankruptcies are expected to resume in 2025 – although most of the major expected bankruptcies are now behind us.
• The occupier market is still challenging, although things are moving in the right direction. Some bankrupt retail chains are relaunching or are being taken over, so the increase in the number of vacant retail properties is not too large. Moreover, there are more and more interested parties for high-quality properties that become vacant. This is especially visible in the high streets of the main shopping cities. An increasing number of retailers are opening brand stores there and, with the right image, these properties are ideal.
• Due to increasing competition in the occupier market, CBRE sees space for rent increases in the main high street locations in 2025. For lower quality high street locations and other types of retail properties, rents are expected to remain stable. The only exception is supermarkets. Consumers increasingly do their grocery shopping online, and supermarkets' margins have come under pressure in the past year – partly due to hefty rent indexations. As a result, we expect more rent reviews here. With the wave of consolidation in the supermarket landscape, the large chains have an increasingly better bargaining position.
• Financing sentiment around larger shopping centres has improved over the past year, and this trend is likely to continue in 2025. Financiers prefer parties with a long investment horizon and plans for sustainability or housing development. Foreign parties also tend to look more at larger (planned) shopping centres or portfolios, often with a large convenience share. As the prospect of financing improves, the number of large transactions will increase in 2025.

Analysis of retail real estate

There is an increasing interest in large (planned) shopping centres. Previously, this was mainly the case with the small neighbourhood shopping centres of usually a maximum of 8,000 square meters. But looking at the average vacancy rate over the past ten years, the larger neighbourhood shopping centres are performing even better. A disadvantage is the relatively higher rate of mutation, but the low vacancy rate shows that tenants are usually found. The risk is therefore limited. This is different for city district centres, and both the mutation rate and the average vacancy rate are higher (10.9% and 10.3% respectively). However, this often results in lower prices^[9]. Some can still benefit from the large housing plans that will take place in many cities, which – with active management – can reduce the vacancy rate in the long term. In other city district centres, higher value can be created by transforming part of the shopping centre.