Zoom in on Retail

Our commercial valuation team values retail properties all over France and has been particularly active over the last few weeks whilst #workingfromhome. We are now delighted to be able to physically inspect properties wherever possible, ensuring that all appropriate precautions are taken.

We are in constant contact with our clients; investors, developers, retailers, banks, and of course our Knight Frank transactional and pan-European teams. Naturally it will take time to restore confidence and to gain visibility, but we are keeping at the forefront of the market to closely monitor the outlook as it evolves.

busy shopping mall, long exposure time, shoppers moving are deliberately blurred

Knight Frank Research produces excellent articles and publications, and these provide insight into how our research teams and agents see the market.  We have rounded up the most relevant to the French and global retail sector from the last few weeks below:

Covid-19 – What is the outlook for the French retail market

Le déconfinement des commerces dans le monde

These are the 10 key retail points we feel are important to take away:

  1. While the majority of retail was in enforced shut down, some sectors saw a surge in activity – notably e-commerce (Amazon), food retailers & Click&Collect (“Drive”).
  2. The loss of turnover and lack of visibility on the duration of the crisis has postponed most potential expansion plans in France.
  3. New retailers, both mass market and luxury sector, planning to develop in France in 2020 were forced to put their arrival on hold, and concentrate on keeping afloat in existing locations.
  4. Prime sites could benefit from the crisis, as retailers will be even more selective regarding store locations, targeting the most profitable and least risky; this does not exclude prime retail streets being impacted by the situation.
  5. The impact on the letting market will vary depending on the sectors and their resilience, but rental values will most probably stagnate, and tenant incentives may increase as retailers will have suffered financially these past couple of months.
  6. The retail investment market has inevitably slowed down, with investors concerned by the uncertainty linked to the virus and its consequences on the retail sector; however, not all retail formats will suffer; food shops & retail parks are the most certain to show resilience.
  7. Some significant core deals are still ongoing with a very moderate rise in yields; secondary locations are the assets that will suffer the most.
  8. Will this crisis change the way we consume and therefore retail as we know it? The rise of working from home, the resolve to consume quality over quantity, and the fear of contracting the virus may provoke reluctance of consumers to go back to their old habits.
  9. Retail will have to adapt rapidly and modernize its tools to captivate and reassure consumers – further e-commerce development, social media use, innovation tech tools to adapt shops to new health regulations…etc.
  10. Retail formats may be reconsidered: greater development of Click&Collect, pick-up stations, and pop-up stores; modification of existing shops to comply with health regulations; and a potential trend to smaller floor areas.


Kate Begg, MRICS, CIS HypZert (MLV), Partner, Head of Commercial Valuations

Héloïse Felman, MRICS, REV, CIS HypZert (MLV), Partner, Commercial Valuations

Emilie Viale, REV, Associate, Commercial Valuations

Nicolas Coquet, Associate, Commercial Valuation