Shopping centre investment activity has increased by 45% in the first half of 2014 compared to the same period last year, according to research by Strutt & Parker, with £2.7bn of assets transacted in the first six months of 2014.
Shopping centre investment activity has increased by 45% in the first half of 2014 compared to the same period last year, according to research by Strutt & Parker, with £2.7bn of assets transacted in the first six months of 2014.
The data shows that in Q2 2014 shopping centre transactions totalled £1.3bn, an increase of 65% from the corresponding quarter of 2013.
The first six months of 2014 has seen a number of notable deals undertaken including Land Securities acquisition of 30% of Bluewater from Lend Lease for £656m and Westfield’s disposal of its Derby shopping centre and 50% of Merry Hill to Intu for a combined £795m. Q2 transactions were spread across the UK and occurred in a range of price bands with investors from all over the world keen to access the sector: KWAP purchased 80% of Intu’s Uxbridge shopping centre for 175m, AEW acquired The Bridges in Sunderland from Land Securities for £152m and LaSalle Investment Management purchased Golden Square in Warrington on behalf of the Alaskan Pension Fund for £141m from L&G/ Lend Lease.
Strutt & Parker’s research highlights that shopping centre investment volumes have continued to rise since 2012 when they reached the lowest levels for 10 years; at the end of the first half of 2014 transactional volumes have already outstripped those for the whole of 2012 when only £2.6bn of assets were transacted. Stock is continuing to be brought to the market to meet the increasing levels of demand for this type of asset, and Strutt & Parker anticipate the second half of 2014 will yield equally good results for the sector similar to the levels reached in 2013.
Mike Rowlands, head of retail at Strutt & Parker said: “Shopping Centre investment has picked up strongly since 2012 and 2014 looks set to exceed 2013’s £4.5bn figure, with investors increasingly confident regarding the strength of the UK’s recovery. Increased competition and competitive bidding across a range of shopping centre assets is being reflected in increasing yield compression, with the IPD monthly figures for equivalent yields in the sector back at levels last seen in autumn 2008.”