Find out about the trends and outlook for the retail market in France in key points.
- The victory over inflation and strong tourist numbers are two pieces of good news for2025, but they are not enough: the economic environment has deteriorated in France, which is hurting retailers’ activity.
- The outlook is more favourable, with employment, growth and consumption all showing signs of improvement by 2027.
- Fears are rife that there will be an overall reduction in demand for retail space, due to sluggish consumption, underperformance of the luxury sector, retailer failures, the rise of e-commerce and the rationalisation of store networks.
- More than just a crisis, the current period is a reflection of an accelerated change in retailing, encouraged by the economic downturn, technological developments and the end of the status quo. New retailers are replacing ageing brands, retail formats are evolving, and the product offer is diversifying to meet consumer expectations.
- The reopening of the French market to international investors is continuing. The share of international buyers rose to 58% of investment volumes in the first quarter of 2025 (compared with 47% a year earlier). This openness bodes well for market depth and activity.
- Retail vacancies remain concentrated in certain areas, while new retailers have entered the French market and numerous development plans are underway. After a much-needed pause, the luxury sector is expected to take the required measures to adapt to its new economic environment.
- In terms of rents, Prime values remained stable. Economic rationality is now driving location choices rather than competition between retailers, which tends to push values up.
- With €1.3 billion invested in retail in the first three months of 2025, activity is up 239% year-on-year. However, this boom is largely due to the completion of two mega corporate deals and therefore remains to be confirmed. Nevertheless, the outlook remains favourable.
- Prime yields remained stable for all retail formats in France: 4.00% for the high street, 6.00% for retail parks and 5.50% for shopping centres.
- The yield advantage of retail assets over bonds varied considerably: while the spread was 257 points for retail parks in March 2025, it drops to 57 for the high street. As a comparison, the yield advantage of prime office assets was 82.
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