Commercial rental values shifting in the face of peri-urbanisation

For decades, the main shopping streets of large cities enjoyed stable values and sustained demand. However, several signs point to growing market segmentation.

• Rising vacancy rates: in 2023, retail vacancy in French town centres reached 12%, compared with 7% in 2015 (Procos). This increase is particularly marked in medium-sized and large cities, where some retail units remain empty for several months.
• Decline of non-food retail: the rise of e-commerce and the decisions of major retailers have led to the closure of many town-centre outlets, notably in ready-to-wear clothing and home furnishings.
• Pressure on rental margins: while some prime locations maintain high rents, others are undergoing a gradual correction. Between 2019 and 2023, rental values fell by 10 to 30% in some secondary shopping streets (CBRE).

This restructuring of the market is leading players to reconsider the sustainability of certain assets and to adapt their strategies accordingly.

Conversely, peri-urban areas are enjoying more stable momentum, driven by changes in consumer behaviour and the flexibility of the spaces.

• Resilient retail parks and retail zones: with an average occupancy rate of 92%, retail parks show more robust performance than some town centres (Cushman & Wakefield). Their appeal rests on a mixed offer (national retailers, leisure, food and drink) and more affordable rents.
• Changing retail formats: the rise of drive-through collection, click-and-collect and dark stores favours locations on the outskirts, where premises are better suited to new logistical and commercial requirements.

The growing strength of outlying areas does not mean a systematic decline of town centres, but rather a gradual reallocation of flows and investment.

The changes under way require market players to adapt continuously. The central question is no longer simply the choice between town centre and outskirts, but the ability to assess precisely the real value of assets in a changing environment.

• Increased market segmentation: the diverging trends in rental values by area and asset type call for a detailed analysis of local trends.
• Adapting investment strategies: investors and asset managers must anticipate the adjustments needed to preserve the performance of their portfolios.
• The key role of property valuation: in the face of these changes, a rigorous valuation is indispensable to establish a value in line with market realities.