European outlet mall performance across the first half of 2023 marks the asset class as a star performer, according to new research from real estate services firm, Cushman & Wakefield.
Outlet malls across major operators have seen sales growth of +11.3% from H1 2019, and 16.9% from the same period in 2022.
The resilience of the sector is proven across Europe, most notably in the UK. The UK has seen outlet sales growth of +9.9% versus H1 2019, even among dampened consumer demand and the removal of VAT reclaim. Weak consumer sentiment has seen Germany lag behind the rest of Europe with just 0.2% growth vs H1 2019, however, sales are up 19.1% on H1 2022 figures.
Iberia has seen a thoroughly positive rebound, benefiting from the return of international tourists, as well as the addition of summer flights being launched from America to regional cities, with sales performance up 18.7% since 2019. This is in line with the region’s positive post-pandemic rebound across all real estate, underpinned by a strong occupational market.
Eastern Europe has rallied from the impact of the war in Ukraine in 2022, with a 16.7% uplift since 2022 and sitting nearly 3 percentage points ahead of its 2019 growth. The region has additionally seen a 26.7% increase in average spend, an indication of operators adapting and succeeding in challenging operating environments.
The lift in sales across Europe comes despite footfall showing a slight dip from 2019 (-1.4%), however, year-on-year growth indicates a rebound, with Germany (+16.5%), Eastern Europe (+7.7%), France & Benelux (+13.5%), South Alps (+15.4%) and Iberia (+12%) all posting double-digit growth.
Richard Ching, partner, Retail & Outlet Malls at Cushman & Wakefield, commented: 'Following a peak in performance in 2019, where it emerged as the star performer of retail destinations across Europe, the outlet market has seen challenges in both the pandemic and the cost-of-living crisis. We know from our experience in 2008, that outlets have performed well in times of economic uncertainty, appealing to bargain-hunting customers domestically and internationally.'
He added: 'What we continue to see is that outlet operators are the masters of reinvention, and our latest data shows that this ability to adapt their offer and services, has led to an increase in spend, and in turn has more than compensated for a small drop in footfall – indicating increased basket size and a customer committed to shopping when they decide to visit. It is through these results that we can see that outlet operators aren’t just proving they can outperform in the face of economic headwinds, black swan events, and structural changes in the market, but that they can continue to go from strength-to-strength.'
