Shopping centre investment demand hits six-year high - Palmers Solicitors

Shopping centre investment demand hits six-year high

Property investor demand for UK shopping centre assets hit a six-year high in 2013 as transaction volumes reached £4.25 billion, reflecting increasing confidence in the commercial property sector, according to new research.

The first IPD/Colliers International UK Shopping Centre Investment Report, published on 13 May, revealed that 72 centres changed ownership in 2013 while the sector delivered a return to investors of 6.7 per cent year-on-year.

James Findlater, head of shopping centre investment at property specialists Colliers International, said healthy macro-economic performance was driving “huge momentum across UK property markets”.

For the report, real estate performance analysts IPD looked at a sample of 223 shopping centre assets, valued at almost £12 billion. Phil Tily, IPD’s executive director and head of UK and Ireland, said that 2013 had marked “a turning point” for shopping centres, with year-on-year values growing by 0.8 per cent compared with a drop of five per cent in 2012.

He added: “2013 signalled a point where investors began to edge back up the risk curve and started to increase their investment strategies outside of London and the South East.”

The South East continued to deliver stronger returns during 2013, but performance levels improved and were positive across wider regional markets, compared with generally negative returns across the UK in 2012.

James Findlater added: “There is some way to go before rental growth can be sustained throughout the shopping centre sector, but the outlook in the occupier market is definitely more positive than it has been at any point since 2008 and the sheer weight of money being attracted to shopping centre assets will continue to drive investment values through 2014 and beyond.”

In a positive climate for commercial property, including shopping centres, Palmers’ Commercial Property team offers a comprehensive range of services for commercial property owners and developers, including advice on office, retail and industrial development, commercial property contracts, investigating title, analysis of search results and enquiries and negotiating local authority and utility agreements. For more information, please contact Carey Jacobs.