The commercial real estate market in Europe, the Middle East and Africa is becoming polarised around prime assets, while secondary locations are facing weaker demand. Real consumer spending in the region is expected to increase by 1.8% in 2026, but lower confidence and economic uncertainty are changing the strategies of retailers and investors.
“An environment of subdued consumption is leading to the polarisation of the retail market in Europe. Major retailers are focusing on strategically important flagship stores in key locations rather than on secondary locations and broader network expansion. As a result, demand is becoming increasingly concentrated in prime destinations and dominant retail formats,” says Larisa Towie, Senior Analyst, Operational Real Estate, in Colliers’ EMEA Research Department.
Investment Is Declining, but Interest Is Being Redirected
Commercial real estate accounted for 15% of total investment activity in EMEA during the first half of 2026. Preliminary data through the end of the third quarter show that volumes declined to EUR 21.5 billion from EUR 25.4 billion over the same period in 2025.
The strongest interest remains focused on assets associated with grocery stores, supermarkets and retail parks. Shopping centres are also attracting investors again, as price stabilisation creates opportunities for restructuring.
Reported transactions include Kering’s sale of a majority stake in Via Monte Napoleone 8 in Milan to Al Miraq Group for EUR 1.1 billion. Landsec has agreed to acquire 100% of Metrocentre in Gateshead for approximately £516 million. AFI Europe has acquired six retail parks from MAS in Romania for around EUR 282 million.
Prime Space Remains Resilient
Companies such as H&M and Inditex continue to review their store networks and direct resources towards flagship locations in key cities. Limited supply of prime space in London, Paris and Milan is supporting demand and limiting pressure on rents.
At the same time, retailers’ sentiment in the EU turned negative in September 2026, reaching -4. This indicates more cautious expectations for the next quarter.
Rents on most high streets and in shopping centres remained stable during the first half of the year. Growth was recorded in Birmingham, Copenhagen and Brussels. Between 83% and 89% of markets in EMEA expect rental levels to remain unchanged over the next 12 months, while Dublin and Budapest are among the exceptions, with expectations of further increases.
Average net initial yields on European high streets stood at 4.16% in the second quarter, while those for shopping centres reached 6.31%. According to Colliers’ analysis, prime assets and dominant formats will continue to outperform secondary locations. Investors are turning to properties with more predictable income and stable tenant demand, while secondary assets will require strong local fundamentals or convincing restructuring plans.
Detailed statistics on average property prices in Bulgaria by city and neighbourhood can be viewed at imot.bg