Luxury high street yields are the most stable among retail investment properties

According to Savills research, European retail investment volumes reached €19 billion for Q1 to Q3 2024, marking a 6 percent increase compared to the same period last year. Luxury high street yields are the most favourable among retail investment properties, remaining stable at 4.4 percent, similar to the situation in the Czech Republic. The attractiveness of high street properties is highlighted by the recent acquisition by the Raiffeisen realitní fond, managed by Raiffeisen investiční společnost, a. s. The Fund acquired the iconic building housing Louis Vuitton at Pařížská 3, for which Savills has gained the property management mandate.

“An exceptional building requires an individual and professional approach. I see added value in proactive efforts, the ability to meet owners’ expectations, and accountability for business and operational results. Our motivation, time, energy, and relationships with clients and the environment are the main investments we bring to property management projects for our business partners and property owners under our care. I believe in strong and long-term relationships built on trust and professionalism,” adds Petra Gaceková, Business Development Lead, Property Management at Savills Czech Republic & Slovakia.

In terms of sectors, high street retail represents 18 percent of total European retail investment volumes in Q1-Q3 2024, retail parks 28 percent and shopping centres 26 percent. As of Q3 2024, Luxury high street yields remain stable at 4.4 percent compared to the previous year, while the European average prime shopping centre yield increased by 9 bps annually, and now stands at 6.3 percent. Mass-market high street yields also compressed by 4 bps annually, reaching 5.2 percent. The European average prime retail warehouse yield stands at 5.9 percent, reflecting a 4 bps decrease year-on-year.

Based on deals signed since early October and those in the pipeline, we project Q4 retail investment volumes in Europe to reach approximately €8.5 billion. This would bring 2024 year total numbers to just over €27.5 billion, a 15 percent increase on 2023 volumes.