Demands rise
In parallel, there is a strong and steady rise in demand for outlet spaces from brands across Europe. Study by Ken Gunn indicates that 588 new outlet stores have been established since July 2023, with the expansion lead by Rituals – which has also entered the Hungarian market with their first location in Budapest this September.
Here is the leaderboard for expansion:
Rituals with 14 new stores
Jack & Jones with 12 new stores
Under Armour and Swarowski with 10 new stores each
Skechers with 9 new stores
Nonetheless, international brands like Levi’s, Guess, adidas, Puma, or Tommy Hilfigher remain among the outlet sector’s most established players.
As Daniel Kroppmanns, Director and Head of Retail Agency Germany at Savills explains:
“Thanks to high purchasing power and relatively low outlet density, Germany remains one of the most attractive expansion markets in Europe,… Brands see opportunities not only to reach new customers, but also to use outlets as a key sales channel for surplus production. In some cases, products are now specifically designed for outlet distribution. We therefore expect demand for space to continue rising.”
Growth driven by experience & quality
According to Larry Brennan, Head of European Retail Agency at Savills, operators are focusing on the experience factor as a key differentiator:
“Outlet owners are investing more heavily in experience-led initiatives—introducing pop-up formats, collaborating with local brands, and upgrading their centers with refurbishments, sustainable design, and enhanced services. These efforts are designed to boost footfall, encourage repeat visits, and attract younger, experience-driven shoppers.”
Despite their niche status, characterized by limited liquidity and irregular deal flow, investor demand for high-performing outlet assets remains strong, says James Burke, Director of Savills Global Cross Border Investment:
“The main challenge is on the supply side. Few owners are willing to sell successful centers, and there are only a limited number of investable opportunities available. Current prime yields for outlet centers in Europe range between 6.0% and 7.0%, typically 50 to 100 basis points higher than those for traditional shopping centers, which average around 6.15%. Given the growing investor interest, we expect outlet yields to compress slightly over the next twelve months.”
