European prime shopping centre rents increase while health, F&B, leisure and…
According to Savills latest research, prime shopping centre rents have increased by 2% CAGR across Europe over the past three years, with Lisbon and Milan at the fore, each rising by 8.1%.
Both markets benefit from exceptionally low vacancy rates of just 3.1% and 1.3% respectively. Given rental rebasing and constrained supply due to a limited development pipeline, conditions for further prime rental growth look set to hold, says the international real estate advisor.
European real retail sales are forecast to grow by 1.3% in 2026, led by CEE and the Nordics, the UK and Iberia. While spending behaviour is fragmenting by age and affluence, Europe’s demographic profile is steadily ageing. By 2050, the median age is projected to reach 48.2, while the population aged 80 and over is expected to almost double.
This highlights both a broader base of older consumers and a rapidly expanding elderly cohort. As a result of these changes, drug stores and Health & Beauty stand out among the best-performing retail categories to 2030, at c.4% CAGR. Conversely, sales growth in clothing and footwear (1%) and homeware (2%) is expected to temper after exceptional post-pandemic performance. Over time, these spending adjustments should lightly reweight shopping centre floorspace towards health and pharmacy, services and everyday essentials, says Savills.
Chris Nichols, analyst, European research at Savills, says: “Naturally, grocery will anchor many neighbourhood centres and fashion will remain an essential ingredient, but the acquisitive tenants of the future are likely to come from health, F&B, leisure and services. These segments lean into the convenience and experience that consumers now seek.”
Larry Brennan, head of European retail agency at Savills, says: “Portfolio rationalisation and the maturing of omnichannel retailing have materially improved shopping centre economics across Europe. Physical stores now increasingly earn their keep not only in terms of traditional sales, but across collection, returns, and fulfilment functions. As a result, some of the occupier risk weighting which had hampered the sector’s investment case has been mitigated, supported by stronger tenant credit profiles than a decade ago.”
According to Savills, shopping centres accounted for 34% of all European retail investment through H1 2026, their highest share since 2022. Recent yield compression has been led by Spain, tightening by 50 bps since the fourth quarter of 2025. Prague, Lisbon, Milan and London each moved in by 25 bps year-on-year.
James Burke, director, global cross border investment at Savills, says: “In the Netherlands, we have seen renewed interest in convenience-led schemes; in Sweden, core capital remains focused on trophy assets; and in Germany, value-add and opportunistic investors are most active. The detail varies by market, but the common thread is capital gravitating towards quality, whether in catchments, schemes or growth prospects.”