New report: Increasing appetite in European grocery real estate

The European grocery real estate market has remained resilient in the face of economic uncertainty. Grocery stores have attracted 37% of the total retail consumption in the EU (27 countries) in 2020. Not surprisingly the sector’s resilience during the pandemic has increased investor appetite. This has led net initial yields for quality grocery stock in Europe’s key retail markets to see continous compression.

According to The European Grocery Real Estate Market, a new report by JLL and Union Investment, the market is set to continue to flourish through 2021.


Interested in longer term trends that will affect the grocery real estate market?

Download the report now:


The main trends

Although there is still uncertainty around the long-term implications of the pandemic, the report seeks to identify longer term trends that will affect the grocery real estate market. - Scroll through the charts below to find out more -

  • Growth of online food sales is expected to slow

    Low profit margins will not sustain widespread online sales and retailers continue to invest in their physical stores.

    Growth of online food sales is expected to slow
  • Growing urban populations are set to create opportunities for well-connected grocery stores.

    Despite the pandemic, employment opportunities and social considerations will continue to drive migration to cities, with urban populations across Europe expected to rise 3.4% by 2035 (3.7% including UK).

    Growing urban populations are set to create opportunities for well-connected grocery stores.
  • Grocery anchored real estate has shown itself to be one of the most resilient assets in the current environment

    The comparative recent performance of food retailers compared to, for example, fashion and the strength of grocer covenants has reinforced the attractiveness of the grocery anchored real estate sector through the pandemic.

    <span>Grocery anchored real estate has shown itself to be one of the most resilient assets in the current environment</span>
  • Rising investor interest in supermarkets and grocery-anchored real estate

    The sector is able to offer both core long term income for more risk adverse investors as well as more value add product where shorter leases and older assets are put to the market. 

    <span lang="EN-GB">Rising investor interest in supermarkets and grocery-anchored real estate</span><span lang="EN-GB"></span>
  • Sustainability, affordability and quality are key drivers

    Changing shopping preferences will be key drivers for floor productivity for the various grocery store formats. Adaptability will be key for the grocery sector to quickly pivot in response to these changing preferences.

    Sustainability, affordability and quality are key drivers
&ldquo;The European grocery real estate market is proving itself to be a secure and defensive sub-sector within the wider retail investment market."

“The European grocery real estate market is proving itself to be a secure and defensive sub-sector within the wider retail investment market."

Mike Bellhouse, JLL, Director, Head of Retail Investment, International Capital Markets

Union-Investment-Henrike-Waldburg

"Despite a sharp rise in demand for home deliveries, physical stores continue to fulfil an irreplaceable role in the food distribution process."

Henrike Waldburg, Union Investment, Head of Investment Management Retail

Your contacts

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Neil Lipscomb
Director Retail Investment,
International Capital Markets, EMEA

+44 (0)207 399 5674
neil.lipscomb@eu.jll.com

Tjard Martinus
Head of Retail Research, EMEA

+31 (0)20 540 5405
tjard.martinus@eu.jll.com

 

 

 

Henrike Waldburg
Union Investment Real Estate GmbH
Head of Investment Management Retail

+4940349194154
henrike.waldburg@union-investment.de

Olaf Janssen

Head of Real Estate Research

+4940349194354
olaf.janssen@union-investment.de