Property investment in Europe's grocery market fell 19% last year to €6 billion, according to the latest data from Savills.
This is 28% lower than the industry's five-year average, the real estate firm added.
But despite this decline, the grocery market proved more resilient than the overall commercial property market, where investment fell 42% year-on-year and 44% on average over the past five years.
Savills noted that European food investment reached €2.7 billion in the first and second quarters of this year, down 20% from the same period last year and 31% below the five-year average.
'Signs of recovery'
However, the company added that there were “signs of recovery” after recording a 9% year-on-year increase in the second quarter of this year.
“Margin pressures over the past few years have created clear winners and losers, with some retailers being better able to insulate themselves from rising costs than others,” said Georgia Ferris, European research analyst, commercial research at Savills.
Investment Amount
Germany and the UK were the only markets where grocery sector investment volumes increased last year, following Slate Asset Management's acquisitions of X-bricks properties (188 properties, €1 billion) and Royal Blue Portfolio (76 properties, €240 million) in Germany, and the sale of Sainsbury's Reversion Portfolio (26 properties, €960 million) in the UK.
However, in the first two quarters of this year, Spain, Italy, France, Norway and Portugal all reported increases in food investment.
“Investor interest in the grocery market remains robust, driven by strong fundamentals further accentuated by the pandemic and Europe's cost of living crisis,” Savills said. “The essential nature of grocery has highlighted the defensibility and resilience of the sector over the past few years.”
