Retail parks have led the retail real estate investment revival of the past couple of years, and U.S.-based Realty Income has been front and centre across the UK, Ireland and, increasingly, continental Europe.

Even as capital markets have stagnated, Realty Income, with its $51B (£39B, €45B) market cap, has built up a portfolio valued at more than $18B (£14B, €16B) in the UK and Europe over the past seven years, and it is now starting to bring joint venture partners into its portfolio.

For the U.S.-listed real estate investment trust, best known for its monthly dividend payments and single-tenant net lease portfolio, the UK and Ireland have become part of what Realty Income’s CEO calls a “second engine” for growth, and there are few signs of any slowing.

Realty Income CEO Sumit Roy said at last month's European Public Real Estate Association conference that the company's rapid European ascent during periods of macroeconomic uncertainty had required contrarian thinking and “the courage to go against the tide.”

“We have a cost-of-capital advantage, we have scale, we can come in and be a solution provider, help consolidate the industry,” he said, reiterating that the goal was to maintain the same strategy, with long-duration, investment-grade tenants and resilient rent structures.

Under Realty Income’s shopping spree, it has grown to circa 390 properties in the UK, representing about 15% of its global rent roll, plus 24 properties in Ireland, representing 0.8% of its total rental income. Add in continental Europe, and that is now around a quarter of its revenues.

Its UK portfolio is valued at $13.4B (£10.1B), and its European portfolio is valued at $4.7B (€4.2B), according to Q2 company filings. From a standing start, in the UK at least, it has built up a portfolio with a similar value to the country's largest REITs.

Retail parks, supermarkets and other necessity-led retail properties have been central to its strategy: The supply-demand imbalance is increasing, with limited new space, strong occupier demand and long-term tenants, it said. In Q2, newly built available space stood at 120K SF and space consented and likely to be delivered in the next two years stood at 540K SF, according to Trevor Wood Associates.

Realty Income's European expansion began in April 2019 with a £429M sale-and-leaseback for 12 UK hypermarkets owned by Sainsbury's in a joint venture with British Land. That deal established a model that has since underpinned much of its UK activity, and it has completed several further sale-and-leaseback deals with the supermarket group, while its wider European portfolio includes grocery and home improvement retailers.

The more recent shift into multi-let retail parks has broadened Realty Income's investment strategy. In January 2025, Realty acquired a three-property portfolio from AshbyCapital for approximately £220M, with assets including Morfa Shopping Park in Swansea, Westside Shopping Park in Guiseley and Abbotsinch Shopping Park in Paisley, Scotland.

In June this year, Realty completed the acquisition of a 683K SF portfolio of eight retail parks from Tristan Capital Partners for approximately £260M at a net initial yield of 7.7%. The portfolio consisted of Brooklands Retail Park and Cardiff Gate in Cardiff, Great Eastern Way in Rotherham, Ravenside in Erdington, 28 East Retail Park in Newport, Hylton Riverside in Sunderland, Riverside Retail Park in Warrington and Hatters Way, Luton.

Irish expansion began in 2023 with the acquisition of the 179K SF CityEast Retail Park in Limerick and 138K SF Blackwater Retail Park in Navan, County Meath, from Eden Capital for a combined €45.9M.

In March 2025, Realty Income stepped things up a level, acquiring an eight-property retail park portfolio assembled by Oaktree Capital Management for €220M, the biggest real estate deal in Ireland last year, followed in June by the acquisition of the Trinity Collection for €123.5M from Marlet Property Group and M&G, which ranked as the third-largest investment in the country in 2025.

After the company’s Q2 trading update, Roy said that while several international clients had become more cautious over Europe earlier in the year amid geopolitical uncertainty, activity had improved and several of those clients were now actively pursuing transactions.

“Europe continues to offer attractive risk-adjusted investment spreads, supported by lower borrowing costs,” he said. “Our established presence in the region and a landscape that remains less competitive than in the U.S [means] we remain constructive on Europe and continue to view it as an important contributor to our growth over time.”

Underlining that conviction, on 14 September, Realty Income and KKR announced the formation of a euro-denominated joint venture, with KKR making an initial investment of €528M to acquire a 49% equity interest in a pan-European portfolio, with Realty Income retaining 51% ownership and continuing to manage the assets. It is one of the largest cross-border European deals this year, and the portfolio is being contributed at a 5.9% cap rate.

In all, 54 properties across Ireland, Spain, Poland and the Netherlands are included across grocery, transportation services, home improvement, home furnishings and automotive parts.

Stressing the appeal of retail as an asset class, Realty Income International Chief Strategy Officer and President Neil Abraham highlighted institutional capital coming in and targeting UK shopping centres, especially out-of-town locations.

“There is quite an aggressive bid for those kinds of assets. In the UK, almost perversely, we are actually seeing institutional capital coming in good size, driving down cap rates,” Abraham said on the second-quarter analyst call. “There are also now one or two larger private equity players driving consolidation. I think the industrial logic is that they sort of missed that play in the UK, but there is still an opportunity across Europe. And the low level of base rates makes it quite accretive on a levered basis.

“So, I do not think we are seeing upward pressure on cap rates in the UK or, frankly, much of Europe, with the exception of Germany. If anything, the pressure on cap rates downward on retail parks in the UK will continue.”