Galeries Lafayette Shopping Center in Paris
According to Jones Lang LaSalle(JLL), the world’s largest commercial real estate consulting firm, pressure on the market continues. The number of retail bankruptcies in the first quarter rose by 4% compared to the same period last year. The situation remains particularly challenging for clothing retailers. This segment has been struggling for nearly two decades. At the same time, stores selling beauty, cosmetics, and health products continue to expand thanks to their small store formats and high profitability.
Due to tenant turnover and store closures, vacant space is increasing. In French city centers, nearly 12% of retail space stands vacant, while in suburban retail parks, the figure is about 17%.
Paris remains an exception. The recovery of international tourism is sustaining demand for brick-and-mortar stores in the city’s most popular areas. In 2025, spending by foreign tourists rose by 5%, and the number of airline ticket bookings for the summer of 2026 also increased by 5%. Commercial activity is concentrated primarily in International Tourist Zones (ZTI), where retailers are benefiting from record tourist traffic.
Outside the International Tourist Zones, the average rental rate in Paris’s residential neighborhoods is 890 euros per square meter. On key shopping streets, such as Rue de Rivoli or the Madeleine–Capucines district, rates range from 2,000 to 3,500 euros per square meter. On luxury thoroughfares—such as Avenue Montaigne or Rue Faubourg Saint-Honoré—rental rates range from 6,000 to 15,000 euros per square meter and have been steadily rising since 2022.
Across Paris as a whole, the vacancy rate has fallen to 5.4%, returning to pre-pandemic levels. In the most prestigious neighborhoods, the vacancy rate does not exceed 3%, and on the Champs-Élysées, rental rates have risen by 10% over the past year.
“The brick-and-mortar store remains the primary source of profit,” said Benjamin Bocar, director of leasing at JLL in Paris. According to him, the shortage of available space in prime locations is intensifying competition among tenants.
Investors are also changing their approach. They are paying increasing attention to existing retail properties, as building new ones has become significantly more difficult. While approximately 600,000 square meters of new retail space was approved annually in France before the pandemic, that figure has now fallen to about 200,000 square meters. Instead of new construction, the market is focusing on the renovation of existing properties.
In the first half of 2026, the volume of retail real estate transactions reached 1.6 billion euros. JLL expects this figure to approach 3 billion euros by the end of the year. Retail parks, which offer higher returns, continue to attract the most interest from investors.
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