Private investors are funneling millions toward retail real estate, signaling renewed confidence in an asset class hard-hit by the pandemic.

New data from JLL reported by The Wall Street Journal shows that small buyers were responsible for 75% of retail asset acquisitions in 2021, a 30% increase over the 10-year historical average. Over the past five years, private investors have claimed 53% of all retail transactions greater than $50M, per JLL.

“Private capital is winning bids on some of the largest retail transactions we have done over the past 18 months,” Chris Angelone, JLL senior managing director and retail co-leader in capital markets, said in a statement. “In most of these cases, private investors outbid REITs and institutional investors.”

Despite some hesitation on the part of REITs and other major institutions, bullishness from the private sector could spur broader interest moving forward, Danny Finkle, senior managing director and JLL’s retail co-leader in capital markets, told the WSJ.

“We expect all of the major capital sources to want to have exposure to retail,” he said.

Grocery-anchored shopping centers totaled 31% of all private capital retail acquisitions in 2021, up from 18% five years ago, per JLL. Neighborhood and community centers followed at 30%, strip centers at 20%, urban retail at 11% and power/lifestyle centers totaling 8%.

Unlike industrial and multifamily, retail was more sluggish to recover from the pandemic. Nearly 15,000 stores closed in the U.S. in 2020, rendering 51.8M SF of shopping center retail space empty, according to Cushman & Wakefield.

But the sector has recorded strong gains over the past 18 months. Retail property transaction volume reached nearly $82B in 2021, a 24% increase from 2019, according to MSCI Real Assets. Transaction volume in the first quarter of this year hit $25B by April 30, an 82% increase over the same period in 2021, per the WSJ.

The survival of many brick-and-mortar retailers has convinced investors that some shoppers still prefer to visit stores in person, restoring confidence in the beleaguered asset class, per the WSJ. While online shopping is still more popular than it was pre-pandemic, JLL data shows that the share of overall sales has cooled since hitting a peak in 2020.

“Looking ahead, we expect this [investment] trend to continue during 2022, as retail fundamentals continue to show signs of strength and investors can realize compelling risk-adjusted returns relative to other asset classes,” Finkle said in a statement.