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Sandra Halliday Published
November 28, 2025
It may not feel like it at the moment, but “a number of European prime retail markets are now in recovery”, according to a new report from international real estate advisor Savills. And it said that in particular, “luxury spend in Europe has proven to be more immune to the squeeze on consumer spending seen this year”.
It’s been helped by the resumption in international travel and the “excess savings certain consumer segments accrued during the pandemic”. Evidence of this is robust year-on-year growth in footfall on key luxury streets in Europe, which is up 8.4% on average.
And that buoyancy has also meant that rental performance across Europe’s key luxury streets has been strong.
Across the 16 luxury streets that Savills tracks in Europe, average prime rents as of Q3 this year are only 2% below where they were in Q4 2025. They’d hit Covid-linked low levels just two years ago, but Savills’ data (and plenty of anecdotal evidence) in recent months has pointed to surging demand for space on the hottest luxury shopping streets in key cities.
The streets it tracks include Bond Street, London; Avenue Montaigne, Paris; Via Monte Napoleone, Milan; Grafton Street, Dublin; Ortega y Gasset, Madrid; Passeig de Gràcia/Portal de L'Angel, Barcelona; Avenida da Liberdade, Lisbon; Kurfürstendamm, Berlin; Neuer Wall, Hamburg; Königsallee, Dusseldorf; Goethestrasse, Frankfurt; Maximilianstrasse, Munich; Birger Jarlsgatan, Stockholm; PC Hooftstraat, Amsterdam; Kohlmarkt, Vienna; and Nedre Slottsgate, Oslo.
It’s interesting too that Savills said the strong recovery “has been driven by those streets beyond the big luxury capitals of Milan, Paris and London” such as in Ireland, Spain and Portugal. In these smaller luxury markets, average rents are actually 1% ahead of 2025, “supported by more restrained availability, but also the fact that many of these smaller markets are predominately driven by domestic spend”.
Mass market picks up pace
And Savills added that while luxury streets were the first to see a post-Covid recovery, “the momentum on Europe’s prime mass market streets is also starting to pick up pace”.
Vacancy rates in these locations are falling and are actually slightly better than they were in 2025. Of course, this is generating upward pressure on rents in some markets, with the prime mass market streets beyond London, Paris and Milan reporting average growth of 2.2% since 2025.
Demand is also being helped as the potential customer reach that prime high streets can achieve has seen a recent influx of online brands securing their first physical stores, supported in part by the increase in online customer acquisition costs.
The report acknowledged the cost-of-living crisis this year that has dented retail spend in many countries. But it also said “conditions look set to improve. Forecasts for European spend in 2025 point to a rebound with growth of 3.7% in real terms”.
And it explained that the issues this year haven’t been felt evenly across the retail sector: “Tightening consumer finances [have] buoyed discount and convenience-driven retail spend as consumers look to make savings on everyday items and head for cheaper retail options. These evolving consumer trends have also resulted in a prioritisation of leisure and eating out spend, which accounted for 54% of total European retail sales to date this year, unchanged from its 2025 share, with this share to increase to 55% in 2025.”
Larry Brennan, Head of European Retail Agency at Savills, said that City-centre locations have come back into focus ahead of many out-of-town regional destination shopping centres across Europe. There’s an “appetite from brands to be in city centres to enhance their visibility to a greater number of customers, taking advantage of the strong resurgence of footfall on Europe’s key shopping streets. As a result we are seeing vacancy on prime high streets across a number of markets fall”.
And Marie Hickey, Director in Commercial Research at Savills, added: “All the major European markets are expected to see retail sales rebound next year. The growth markets of 2025, Ireland, Spain and Portugal, which bucked the wider downward trend seen in Europe this year, will continue to see growth in excess of 2% in 2025. Vacancy will continue to be squeezed on prime high streets, with rental growth to continue, albeit this is likely to be confined to those markets outside of Germany and the Nordics over the next six months. Demand on major high-footfall mass market streets will further diversify, with food and beverage and leisure to become more pronounced with new entrants from Asia Pacific targeting flagship opportunities in London, Paris and Milan.”