Finding - and creating - opportunities in the retail sector

by Benedetto Giustiniani , Head of Southern Europe Region

The recently concluded MAPIC Italy gathered in Milan the Italian retail operators community, and put the retail sector under the spotlight. At Generali Real Estate, retail continues to play a crucial role in our investment strategy, encompassing two very different segments: high-street retail and shopping centers. Retail represents roughly 20% of our portfolio under management, a high-quality portfolio spanning across different European countries, managed through dedicated pan-European funds.

Zooming in on Italy and Iberia, we can observe that high street retail is still struggling to fully recover the slowdown of the Covid times in terms of investments, but steadily growing in the central areas of the main cities (Milan, Rome, Madrid, Barcelona) in terms of prime rent and prime yield. This is a sign that demand for high quality spaces remains very strong and that physical stores continue to be central in the strategy of commercial and luxury brands, aiming to enriching the customers’ visit and shopping experience in-store with an exclusive touch.

For example, in Milan, the last few months saw the openings of some important brands in our assets. In Cordusio, the retail spaces are fully operational with high-end brands the caliber of HUGO BOSS , SWAROVSKI and Aesop (next to the innovative END. store which opened its doors in 2023), perfectly matching the top-quality hospitality proposition by Palazzo Cordusio Gran Melià and its restaurants. Just steps away, in Duomo 31, a new Swarovski flagship store has just been inaugurated, with an innovative format where everything is about crystal, and world-firsts -such as the newly launched Swarovski Created Diamonds- are featured. While commercialization is well underway for other top retail spaces in the city center: via San Paolo / via Agnello, which will soon undergo full requalification to reach 2000 sqm.

Demand for central, high-quality retail spaces remains high also in Madrid, especially in the most popular and sought-after shopping areas.

As far as the shopping center sector is concerned, we invest across Europe through a dedicated pan-European investment strategy focused on the so-called 3D (Dominant, Destination, Diversified) assets, which show strong fundamentals, with almost full occupancy and healthy prime rent. Alongside Germany (PEP in Munich) and Spain ( Puerto Venecia in Zaragoza), our shopping center exposure includes CityLife Shopping District in Milan, the unique venue at the center of CityLife which registers more than 11 million visitors per year, thanks to a rich food and entertainment offer alongside shopping, and to the proximity to offices, residences and a very popular public park which make it a ‘destination’. But also The Wow Side - Shopping Centre , our shopping center in Rome which is undergoing a massive repositioning project, thanks to partnerships with international brands like IKEA and a huge effort in building a distinctive and innovative leisure offering.

All in all, the European retail sector is facing a profound transformation and polarization, but we continue to find – and to create – opportunities both in high-street retail and in shopping centers.