By Günter Kaufmann, Managing Partner of ambas Real Estate GmbH
The current debate around retail real estate is clearly shaped by caution. Geopolitical tensions, economic policy uncertainty and a fundamentally different interest rate environment have materially changed the framework conditions for investors and lenders alike. The key question, however, is not whether valuation and financing realities have shifted, but how these shifts should be interpreted.
There is little doubt that macroeconomic risks today are higher than in many previous market cycles. In such an environment, investors require higher risk premiums, particularly when compared to low-yielding but largely risk-free alternatives. This development is not asset-class specific. Retail real estate is being assessed more defensively, but not fundamentally more critically than other property sectors.
At the same time, price corrections in the retail segment have already progressed significantly. As a result, both equity investors and lenders are once again encountering entry levels that can be justified economically. It is less about the asset class as such. More importantly, location quality, cash flow stability and effective active asset management are key.
This commentary was published in ACROSS Issue 1|2026
Download the full magazine to view similar insights and news from the European placemaking scene.
Financing: Bottleneck or selective Filter?
Debt capital is frequently described as the main constraint on transactions. This view, however, oversimplifies the situation. Financing remains available, but it has become more selective and explicitly cashflow-driven – functioning less as a volume-driven growth lever and more as a qualitative filter. Lenders are prepared to finance assets where business models, income stability and future prospects are transparent and credible.
The more structural challenge currently lies on the equity side. In many cases, additional equity is required to facilitate refinancings, service debt or bridge temporary valuation adjustments. Traditional senior lending often does not fully close these gaps for more complex assets. As a result, joint ventures, co-investments and mezzanine or transitional capital structures are gaining relevance. These solutions are not a sign of market weakness, but rather an expression of a more differentiated and disciplined capital market.
Political Risk: No Paradigm Shift in Valuation
Geopolitical and economic policy risks have always been an integral part of professional valuation practices. Country risk, political stability, regulatory frameworks and currency exposure have long shaped international allocation decisions. What has changed is not the methodology, but the weight assigned to these risks. Heightened uncertainty leads to adjusted assumptions, not to a redefinition of valuation principles.
About Günter Kaufmann
Günter Kaufmann was appointed Managing Partner of ambas Real Estate GmbH in January 2026. A graduate in business administration, he brings more than 25 years of experience spanning real estate, finance, and corporate leadership. Most recently, he served as Chairman of the Executive Board of Auktion & Markt AG. Prior to that, as Head of Real Estate, he led the German real estate lending business of the Bank of Scotland, primarily advising international investor groups. His expertise focuses on strategic corporate development, the structuring of complex real estate financing, and the management of non-performing loans (NPLs).
Europe: Differences without structural Distortions
Across Europe, differences in the financeability of retail assets are clearly observable. These differences are largely structural and historically driven, reflecting national banking systems, regulatory environments and the legacy exposure of individual lenders. Cross-border transactions also tend to attract higher financing costs than domestic investments, which is a logical consequence of information asymmetries and risk assessment rather than evidence of long-term competitive distortion. Over the medium term, a convergence of risk premiums can be observed. The phase of exceptionally aggressive lending margins in selected markets has ended. Today’s financing conditions across Europe are more aligned and more realistically priced.
Asset Management Under Capital Pressure
Current market conditions do not point to a shift from value-oriented to purely risk-minimizing asset management. Instead, they require clearer prioritization. With capital constrained investment decisions focus more strongly on measures that stabilize and enhance cashflow. Larger discretionary capex programs are, in some cases, being deferred. Paradoxically, this environment creates opportunities. In a few years’ time, assets that have been actively and strategically managed throughout this phase will stand out clearly from those where necessary investments were postponed indefinitely. Active asset management therefore remains a central value driver – particularly in a challenging market environment.
Conclusion
The prevailing caution in the market reflects rational risk assessment rather than stagnation. Retail real estate is not fundamentally disadvantaged relative to other asset classes; it is simply important to have a deep understanding of this asset class and its key performance indicators for adequate risk and reward evaluation. For investors and lenders who understand this dynamic, the current market environment offers compelling opportunities
