Prime rents on Europe’s leading shopping streets, in shopping centres, and retail parks have increased on average during 2024. Leisure concept operators have been the most active segment, occupying 20% more floor space year-on-year, according to a study by Cushman & Wakefield.
In its latest European Retail Radar report, the company analysed over 2,000 retail property lease transactions across Europe in which it was involved, to provide a representative picture of the retail landscape.
Operators of leisure concepts have been the most active, with a 15% increase in stores and a fifth more retail space leased compared to 2023. As a result, despite accounting for the fewest transactions of the 10 retail segments, leisure concept operators had the third-largest share of occupancy (9%) by floor area.
Robert Skládal, Head of Shopping Centre Leasing and Releasing at Cushman & Wakefield, explains: "Leisure concepts are no longer an add-on, but a key part of a successful retail mix. Owners and brands are now emphasising the experience, footfall synergies and time on site."
The overall number of retail transactions remained flat year-over-year, with a clear preference for units under 600 sq m seen in nearly all retail segments, which accounted for 84% of stores and two-fifths of leased space in 2024. The exception was leisure operators, who can use larger units for concepts such as climbing walls, trampoline parks or virtual reality centres.
Rents grew across all retail property types in 2024. For retail parks, rents reached new highs across Europe. Major high streets also saw strong rental growth: 44% of the 209 tracked high streets recorded positive rental growth (compared to 30% at the end of 2022 and 35% at the end of 2023), and 53% had stable rents.
In Prague, the retail market reflects key European trends. Prague's main high streets, led by upmarket Pařížká Street and mass-market Na Příkopě Street, have seen significant demand growth, particularly from fashion and leisure operators. The limited availability of premium space in these areas continues to push rents up.
"The luxury segment in Prague is developing rapidly. Brands create a complete luxury experience and compete intensely for the best available locations. In the coming months, we expect to see the opening of Ermanno Scervino, MaxMara, Grenardi, Damiani, Pasquale Bruni, La Table and KodlContemporary stores on Pařížská Street," commented Marjan Gigov, Specialist for Leasing Premium and Luxury Retail Spaces CE at Cushman & Wakefield.
While leisure concepts saw the largest growth, fashion retailers remained the busiest retail segment, accounting for 39% of floor space and nearly a third of transactions.
Sportswear brands JD Sports and Sports Direct were among the most active in 2024, as were brands owned by H&M (H&M, COS, & Other Stories, Arket and others) and Inditex (Zara, Massimo Dutti, Oysho, Pull & Bear, Bershka and others).
The Food & Beverage (F&B) was the second most active in terms of transaction volume, with a 3% increase in the number of stores and approximately the same amount of floor space leased. In 2024, it accounted for 17% of closed stores and 8% of leased space. Established fast food operators such as McDonald's, KFC and Burger King led the way, along with expanding businesses including Hawaiian Poke Bowl and several bubble tea operators such as Bubblify and Crazy Bubble.
As retailers adjust to rising rents while facing broader industry challenges such as fragile consumer confidence, margin-threatening operating costs and trade tensions - and more recently tariffs - creating uncertainty over sourcing and inventory prices, their real estate strategies are focused on maximising revenue capture opportunities while optimising costs.
Key stores are being converted into strategic destinations with an emphasis on quality over quantity. Accelerating cross-border activity is also significant as companies look for new markets in which to grow and develop. Whereas in the past, brands tended to expand more deeply within a single market, today they are opting for a strategy of fewer but key store locations. This is creating extraordinary demand for prime locations as retailers compete for limited space, further fuelling rental growth in key locations.
