As a result, retail accounted for 20% of commercial transactions in France, 800bps higher than the 10-year average⁵. However, changing consumer behaviour due to a high inflation and a consumer confidence lower than GFC levels⁹ suggests a worsening outlook for retail.

Retail parks could however maintain their attractiveness in this environment as they offer a cost-conscious alternative to other forms of retail.

Their fundamentals are further supported by the fact that (i) supply should stay limited due to the aforementioned new policies to limit greenfield developments, and (ii) the fact that the real estate format and locations are well suited for omnichannel distribution and supporting last-mile logistics. Investors are taking note and while the retail prime yield increased by 30bps to 3.5% since Q3 2021, retail parks saw a yield compression of 25bps to 5.0% in the same timeframe⁵.

As stated in previous quarters, well-let retail parks continue to offer an interesting proposition as long as pricing remains attractive.

• 5/Source: BNP Paribas
• 9/Source: INSEE