European Grocery Retail in H1 2026: What We Are Seeing Across Our Real Estate Markets

The first half of 2026 brought continued resilience to Europe’s grocery retail sector despite a more uncertain economic backdrop. In this report, we examine the trends that shaped the market through the lens of Greenman’s portfolio across Germany, Poland and France, combining our experience on the ground with the latest market data.

The more interesting story of the first half was not grocery’s resilience, which is well established by now, but how differently that resilience played out across our markets. Poland stood out for its development pipeline and continued occupier expansion, Germany remained a more mature and stable market, and France was comparatively quieter as new institutional equity remained constrained. Those differences are central to how we think about the three markets and the role each one plays in the portfolio.

“A single-market strategy forces you to compromise on either yield or stability, whereas combining these three creates a genuinely complementary strategy,” says Barbara Wojdelko-Zajdel, CEO of Greenman Poland.

Poland: where the shift is clearest

Polish prime retail park yields stabilised at approximately 6.75% to 7.25%, while the bid-ask spread narrowed more quickly than in Western Europe, helping to unlock transaction activity. Retail accounted for 34% of the EUR 3 billion invested across Polish commercial real estate during the period.[4][5] Poland also offers a typical yield premium of 150 to 250 basis points over Germany, illustrating the different role each market plays within the portfolio.

Behind those figures is a market that remains structurally different from much of Western Europe.

“While Western Europe deals with strict planning restrictions and ageing stock that requires heavy capex, Poland delivers roughly half a million square metres of new space every year, over 80% of which is open-air retail parks targeting regional towns that are still under-stored,” Wojdelko-Zajdel says.

That pipeline is being met by strong occupier demand. Grocery operators including Biedronka, Dino, Kaufland and Lidl continue to expand, alongside non-food retailers such as Pepco, Action and Rossmann. For investors, the combination of new supply, retailer expansion and higher yields gives Poland a different growth profile from more mature Western European markets.

The lease structure is another important part of the picture.

“Crucially for foreign capital, the leases are almost universally euro-denominated and indexed to Eurostat CPI, so you get the growth and yield upside of CEE without taking on currency risk,” Wojdelko-Zajdel says.

Germany and France: Stability and scale

Germany provides a useful counterpoint. More than half of German retail transaction volume in Q1 was invested in food-anchored assets, while activity was spread across a greater number of smaller transactions.[2][3] Germany is less about rapid expansion and more about income visibility and stability. Its mature grocery market, strong tenant covenants and long lease durations provide a lower-risk counterweight to the stronger growth and higher yields available in Poland.

France plays a different role again. Its scale, established grocery market and major national operators, including Carrefour, exposure to a large domestic consumer market add diversification to the strategy. New institutional equity remained relatively constrained during the first half, and investment activity was quieter than in some other European markets.[1]

Wojdelko-Zajdel estimates that Poland offers a typical yield premium of 150 to 250 basis points over Germany, illustrating the different role each market can play within the portfolio.

What matters at portfolio level

Some of the more useful indicators of resilience are found at portfolio level. Across Greenman’s funds, the weighted average remaining lease term exceeds eight years, providing long-term income visibility at a time when economic and financing conditions remain uncertain.

Operating across several markets also strengthens relationships with pan-European retailers that occupy assets across multiple jurisdictions, improving tenant access and acquisition opportunities.

The wider market picture supports what we continue to see on the ground. European retail investment totalled EUR 37 billion over the twelve months to the end of Q1 2026, unchanged from a year earlier, while out-of-town retail attracted EUR 9.7 billion, more than any other retail segment.[1]

What this means for H2 2026

As we move into the second half, the differences between markets are likely to matter even more. Competition for grocery-anchored assets is increasing, narrowing some of the yield premium available during the market downturn, while higher financing costs are likely to limit the scope for returns driven primarily by valuation movements.

That puts greater emphasis on income and how it can be grown at asset level. Rental income, contractual indexation and active asset management will remain central.

“Rooftop solar arrays and EV charging networks are no longer just an ESG box-ticking exercise,” Wojdelko-Zajdel says. “They are a tangible way to generate secondary income directly from tenants and shoppers.”

We also expect consolidation to become more visible, particularly in Poland.

“Expect further portfolio consolidation, particularly in Poland, as fragmented regional park portfolios get absorbed by institutional funds seeking operational scale,” Wojdelko-Zajdel says.

Sources

[1] BNP Paribas Real Estate, European Retail Market Q1 2026
[2] CBRE Germany, Retail Investment Q1 2026
[3] JLL, Germany Investment Market Q1 2026
[4] JLL, Poland Real Estate Investment Pulse Q2 2026
[5] ACROSS / Avison Young, Poland Investment Market H1 2026

Important Note
This update is for information purposes only. Shareholders are not required to act upon any of the information contained in this update.