Saturday, 29 August 2026
Sweden’s retail property market accelerated sharply during the second quarter of 2026, with transaction volumes approaching four times their level a year earlier as improving consumer spending, firmer rents and lower investment yields encouraged capital back into the sector. The recovery, however, remains concentrated in stronger locations, leaving weaker retail properties facing a more difficult outlook.
Retail property transactions reached SEK 12.2 billion in Q2 2026, representing approximately 15% of total Swedish commercial real estate investment during the quarter. Twenty transactions were recorded. The first-half total reached SEK 14.9 billion, almost matching the SEK 15.3 billion transacted during the whole of 2025 and already exceeding annual volumes in both 2023 and 2024.
Several sizeable transactions contributed to the increase. Vendus acquired a portfolio of 51 retail properties for approximately SEK 2.7 billion in a transaction involving ICA Fastigheter and Bonnier Fastigheter Invest. ICA Fastigheter separately acquired another ten properties from Trecore with a value of around SEK 2.9 billion. International investors were also active, with a group of Norwegian buyers acquiring the 41,000 sqm Strömstad Shoppingcenter. Willys and Jysk together account for around half of the property’s rental income, illustrating the importance investors continue to place on established anchors and resilient income streams.
Investment pricing suggests that the increase in transaction activity is being accompanied by stronger competition for selected assets. Prime yields for grocery-anchored retail parks fell to 5.50%, 50 basis points below their level a year earlier. Non-grocery retail parks were priced at around 6.75%, also representing a 50-basis-point annual movement. Shopping-centre yields stood at 6.25% in Stockholm and 6.50% in Gothenburg, while Malmö remained at 7.25%. The differences demonstrate that improving sentiment has not removed the considerable pricing variation between markets and asset types.
Unlike a recovery driven exclusively by property capital, the improvement is being supported by stronger retail consumption. Sales volumes increased 2.2% between March and May compared with the preceding three months, with both durable goods and groceries increasing 2.5%. Compared with May 2025, overall retail volumes were 8% higher, with durable goods increasing 10.3% and grocery sales excluding Systembolaget rising 5.5%.
The improvement follows several difficult years for Swedish households, during which inflation and higher borrowing costs weakened purchasing power and encouraged consumers to postpone larger purchases. Household willingness to make major purchases has since recovered substantially from the lows of 2022 and 2023, although it remains below its longer-term average. The direction is therefore positive without yet representing a complete normalisation of consumer confidence.
Improving conditions are also becoming visible in the occupational market. Shopping-centre vacancy in Stockholm declined from 9.4% to 8.0%, while Gothenburg recorded a reduction from 6.8% to 6.3%. Gothenburg’s high-street vacancy fell from 3.0% to 1.5%. These movements suggest that stronger locations are beginning to translate the consumer recovery into better property fundamentals.
Prime rental growth provides another indication of the strengthening market. Stockholm shopping-centre rents reached SEK 9,500 per sqm annually, representing a 15.2% increase from a year earlier. Gothenburg increased 6.25% to SEK 8,500, while Malmö rose 5% to SEK 4,200. High-street performance was more varied. Stockholm remained by far the most expensive of the three cities at SEK 22,500 per sqm annually, although that level was unchanged year-on-year. Gothenburg was also stable at SEK 12,500, while Malmö recorded a 9.3% increase to SEK 4,700.
Retail parks present a more complicated picture. Prime rents for grocery-anchored properties stood at SEK 2,650 per sqm annually, up 1.9%, while non-grocery properties remained unchanged at SEK 2,350. The relatively modest movement in rents compared with the improvement in investment yields indicates that part of the change in asset pricing is being driven by greater investor confidence rather than a dramatic acceleration in underlying rental income.
More importantly, the recovery is not extending evenly across the market. Stronger retail warehouse locations continue to attract occupiers, while space in weaker secondary properties is considerably more difficult to lease. That distinction is likely to become increasingly important for investment values. Properties with established catchments, strong anchors, good accessibility and sustainable rental income can benefit from improving occupational conditions and greater competition between investors, while assets without those characteristics may experience little of the same uplift.
Sweden therefore appears to have moved beyond the most defensive stage of the retail property cycle. Capital is returning, yields for selected assets are tightening, consumer spending is recovering and the stronger rental markets are showing greater momentum. But the figures do not indicate a general revival across every part of the sector.
Instead, the recovery is reinforcing an increasingly selective market. The strongest properties are benefiting simultaneously from returning investment capital, improving consumer conditions and healthier occupational fundamentals, while weaker assets continue to face structural challenges. For the wider European property market, Sweden provides another indication that retail is becoming investible again after several difficult years, but location, tenant strength and the durability of income are increasingly determining which properties participate in the recovery and which are left behind.
Source: CBRE Sweden
