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Convenience real estate proves its resilience

28 Oct Convenience real estate proves its resilience

Posted at 09:08h in Insights by

As we reach the final quarter of 2025, convenience real estate has proved its resilience once again. In this latest blog, we look back on the year so far and examine the prospects for necessity retail, multi-let light industrial, urban logistics and self storage moving ahead.


Necessity retail continues to perform strongly

Necessity retail, comprising retail parks and convenience centers, continued to experience healthy leasing demand in 2025 as retail occupiers implement expansion plans, resulting in a consistent uptick in rents. Retail parks and convenience centers saw year-on-year rental growth of 4% in Q2 according to CBRE’s European Shopping Centers Performance Index, the strongest of all asset types tracked by the index.

Over the past decade, Mitiska REIM has built strong relationships with leading retailers across Europe, and we are seeing increasing demand from both supermarkets, discount retailers, pet stores, homeware chains and many more for new sites which are modern, convenient, affordable and sustainable.

Necessity retail has continued to perform strongly and has shown remarkable resistance against traditional retail headwinds. Offering easy access to click & collect facilities, extended trading times and free parking, retail parks and convenience centers have become a vital part of omnichannel retail strategies, providing a channel that works for both retailers, in terms of profit, and consumers, in terms of convenience.

Vacancy rates are the lowest of all retail sub-sectors according to JLL, with necessity retail benefiting from robust footfall in H1 2025 and occupiers seeing a higher percentage of customer visits which convert into sales. JLL says this has contributed to making retail parks and convenience centers the most preferred retail format among investors in 2025, with investor sentiment at the highest level since the early 2000s.

Looking ahead, necessity retail is on the shopping list of investors. For instance, Nuveen maintains a positive outlook for necessity retail assets, based on sustained consumer demand for essential goods and services, limited new supply pipeline, growing retailer expansion plans in suburban markets and attractive risk-adjusted return potential.

We at Mitiska REIM continue to see the necessity retail proposition based on convenience, essential shopping and value for money as the key factors in driving shopper footfall and investor interest, with retail brands attracted to the affordable buildings, flexible design and sustainable solutions offered by the asset class.

Robust investor appetite for multi-let light industrial and urban logistics

While 2024 represented a mixed year for the European industrial and logistics market, CBRE research shows it remains the second most sought-after market by a significant margin.

Institutional investor appetite for multi-let light industrial and urban logistics assets has remained strong, particularly for properties that require capex from a value-add perspective. Located in urban areas where available space is becoming increasingly limited, CBRE says these property types have the greatest potential for rental growth, in addition to being ideally placed for last-mile deliveries.

After declining in 2024, average vacancy rates continued to rise in the first months of 2025 on the back of business concerns around slower economic growth and specific trade impacts. Looking ahead, CBRE forecasts a stabilization in vacancy rates, underscoring the sector’s relative strength amid broader economic uncertainty.

The light industrial and urban logistics real estate market is still underdeveloped in Europe, and demand for space remains supported by a long-term trend towards the re-industrialisation of Europe and the need for more robust supply chains. SMEs are now looking for more sophisticated and institutional facilities which are convenient, affordable and flexible, located much closer to their customers and their employees, and within the last mile.

CBRE predicts improving prospects for both multi-let light industrial and urban logistics moving into 2026. CBRE expects leasing activity to pick up as macroeconomic conditions improve, saying that there is still good demand for well-located and well-specified space in what will continue to be an important growth sector.

Consumer demand driving rental growth in self storage

The self storage sector has demonstrated its resilience in the first half of this year according to Savills, delivering solid rental growth and occupancy, underscoring the strength of the asset class even in an unsettled macroeconomic environment.

In Belgium and across other European markets, self storage is currently in an early expansion phase, with structural undersupply and rising awareness driving expansion.

Savills also notes that digital management platforms are reshaping the sector, streamlining the customer journey through online booking, payment and communication tools, while also enabling remote site management and leaner staffing models. Technology-enabled security systems, including smart access controls and digital surveillance, are being widely adopted to enhance operational efficiency and customer confidence.

Savills expects resilient consumer demand to drive rental growth, with high-quality, modern, premium facilities to perform strongly and be well placed to out-position older stock.

 

Looking back on the year so far, we at Mitiska REIM have seen robust fundamentals across our European portfolio and, looking ahead, we think that convenience real estate remains strongly positioned, particularly for those investments that require capex and hands-on asset management, which value-add strategies by specialist managers such as Mitiska REIM can capitalize on.

 

Links to market reports referenced in this blog:

 

Past performance is no guarantee of future results. Mitiska REIM is a licensed alternative investment fund manager under the Belgian 2014 AICB Law. Mitiska REIM acts in its capacity as fund manager (AIFM) of MEREP Light Industrial, MEREP 3 and FRP, and fund advisor of FRI and FRI 2.

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