Evolution over broad-based expansion

European retail park stock has now reached 51 million sq m, on the back of a 2.4% increase last year, the strongest year of development activity since 2020 (Figure 10). Although pan-European evolution spanning consumer behaviour, occupier mix and asset strategy is evident, the physical stock base is expanding more selectively.

A two-speed development landscape

Much of the retail park supply growth since 2020 has been concentrated in Central and Eastern Europe, with Spain and France also recording notable expansion. Stock increased by around 17% in Spain and 19% in France, while Poland more than doubled its retail park stock. Romania and the Czech Republic also expanded rapidly, recording growth of 54% and 34% respectively over the same period (Figure 11). In Central and Eastern Europe, new schemes have targeted smaller towns and cities, sometimes without a dominant shopping centre, allowing the retail park to assume the role of principal retail destination within local catchments.

Developers are becoming increasingly selective, however, and the current pace of growth is unlikely to be sustained indefinitely. Even so, Polish schemes under construction still equate to 17.8% of existing stock. Set against just 0.8% in the UK, 1.2% in France and 2.0% in Germany, the contrast is stark. Outside a small group of faster-growing markets, development pipelines remain modest, reinforcing a more irregular pattern of expansion across Europe.

Growth in context

Framed in provision per capita terms, disparities in supply are easier to contextualise, although provision alone does not determine where development occurs. European retail park density has risen from 100 sq m per 1,000 inhabitants in 2020 to 109 sq m today, still substantially below the 261 sq m recorded for shopping centres. Country-specific figures vary considerably, ranging from 57 sq m per 1,000 inhabitants in Portugal to more than 330 sq m in Sweden, where saturation may restrict future supply (Figure 12).

Viewed through that lens, Poland’s recent expansion feels less extraordinary. Energetic development activity has raised provision to 104 sq m per 1,000 inhabitants, broadly in line with the European average and still below many mature Western European markets. Rising incomes, ongoing retail modernisation and continued expansion by operators such as Action, Pepco, TEDi and Sinsay suggest that development is still responding to unmet demand.

A complex development equation in mature markets

More mature Western markets have far less room for manoeuvre. Since 2020, retail park density has fallen by 9% in Ireland, 3% in the UK and 2% in the Netherlands, as stock growth has failed to keep pace with population growth. Occupier appetite remains healthy, but bringing additional space to market is becoming progressively more challenging.

Part of this can be traced back to policy. Planning systems in many countries have actively discouraged out-of-town retail development in an effort to preserve the vitality of historic town centres. In this sense, market maturity can be thought of as a function of density, demand and occupier mix, but also of planning culture and decades of choices about how retail should be distributed.

Viability adds another layer of constraint. Rising land and construction costs have been compounded by more demanding building standards and energy-performance obligations. Both new development and the upkeep of existing assets have become more capital intensive.

These constraints create a complex development equation, neatly illustrated by Valvert. At 65,000 sq m, the scheme at Sainte-Geneviève-des-Bois is the largest retail park completed in France since L’Atoll in 2012. Its significance lies in its rarity. It reflects just how infrequently developments of this magnitude now come forward across much of mature Europe.

Existing stock comes to the fore

Looking to the future, the existing stock base is likely to become the focal point for evolution. Fortunately, the broadening range of ancillary uses, consistent with the European trends outlined earlier in this report, can require relatively little net new floorspace. A gym, leisure operator or click-and-collect facility may alter how a scheme is used without materially changing its footprint. Additional income and utility can therefore be unlocked through subdivision, extension, redevelopment and the reconfiguration of existing schemes.

Outside the high-growth CEE region, additional space is likely to be delivered in a more piecemeal fashion. The recycling of vacated big boxes, supermarkets and underutilised car parks are means through which occupier demand can be accommodated. Even then, progress can be slow. Fragmented ownership often complicates decision-making across multi-owner schemes, leaving apparently obvious opportunities stubbornly hard to unlock.

All of this implies that change within the existing stock base will run ahead of new development, placing greater weight on the enhancement of existing sites. For well-located, adaptable stock, the resulting scarcity strengthens pricing power. Such assets become more strategic and harder to replicate. This underpins growing investor demand for core-plus and value-add opportunities where refurbishment, reconfiguration and active asset management can unlock further value.

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