- The latest Retail Radar study of over 900 retail rental transactions completed by Cushman & Wakefield across Europe in the first half of 2024 reveals activity in line with that of the first half of 2023
- Fashion retailers continue to lead the way, representing nearly a third of total transactions over the half
- Rising tourist numbers have boosted activity for luggage and travel goods retailers, with travel flows expected to exceed pre-pandemic levels for the first time
Leasing activity by Cushman & Wakefield in Europe in the first half of 2024 remains strong and is in line with the performance recorded over the same period last year, according to figures from the latest Retail Radar publication.
The real estate services company, a world leader in the retail sector, has analyzed more than 900 transactions concluded in Europe in H1 2024 and confirms that the number of transactions completed in the first half of 2024 remained stable compared to the first half of 2023. The fashion industry was the most active sector overall, representing almost a third of retail transactions.
Fashion brands occupied almost 40% of the total leased area, with JD Sports and brands belonging to the Calzedonia and Inditex groups among the most active. Another third of transactions concern food sector operators and personal equipment brands, representing 15% and 14% of new signings respectively.
In personal equipment, luggage brands, which have seen their sales increase with the recovery of the global tourism industry, have recently amplified their development. Among the brands established in 2024 are Tumi, Delsey, Carl Friedrik and Rotate. The latter maintain expansion plans, judging by traffic forecasts for 2024 that would exceed pre-pandemic levels for the first time.
By market segment, mass-market retailers accounted for around 70% of leased areas and overall transaction volume in the first half of 2024, with a 12% increase in number and 5% in leased areas compared to the same period in 2023. Premium retailers, on the other hand, recorded a notable decline, with a decrease of more than 50% in leased areas, while the number of transactions carried out by luxury retailers decreased by 40% compared to the same period last year.
Real estate activity in the retail sector remains mainly focused on small areas, with units of less than 200 m² representing more than half of transactions.
Rent levels increase or remain stable
Rent levels across all asset types have seen significant downward adjustments following the onset of the pandemic. However, analysis of data collected for over 200 high streets, over 100 shopping centre submarkets and over 100 retail park submarkets, shows that all three asset types have experienced positive rental growth over the past few years.
Retail parks have been very resilient and rental levels are now on average 9% higher than they were in December 2018. Shopping centre and town centre rents have seen conditions improve and almost all markets have seen rents increase or remain stable over the past 12 months.
Outlook
In terms of outlook, the economic backdrop and consumer confidence have improved steadily since the beginning of the year and are expected to continue to recover in the near term. However, sales volumes have remained broadly stable, indicating that the improvement in consumer sentiment has not yet fully transmitted to sales figures.
An improvement in the general economic backdrop is expected in the near term, particularly with interest rates and inflation falling. The outlook for consumer spending in Europe remains cautiously optimistic, with sales volumes expected to grow modestly in the second half of this year.
Despite ongoing pressures, retailers’ confidence has improved in recent months in terms of their business prospects. Their real estate strategies, particularly the role of physical stores, continue to play an important role in consumer engagement and sales figures.