Investment in UK shopping centres remains strong

30 Sep, 2005, London

Investors' appetite for shopping centres remains strong. Figures for the third quarter from property adviser Cushman & Wakefield Healey & Baker (C&W/H&B) show that £2.18 billion was transacted bringing the total for the year to date to £4.94 billion.

At this stage in 2004 the year to date figure was £4.766 billion before a strong final quarter gave a total for the year of £7.8 billion. There are also shopping centre deals worth around £1.75 billion currently under offer.

Major transactions in the third quarter include the Southside Shopping Centre in Wandsworth, South London, Westwood Cross in Thanet, Kent and St Stephen's, Hull.

David Erwin, head of retail investment, C&W/H&B said:"The market is stronger than ever. Investors, whilst cautious about some perceived weaknesses in the retailing sector, remain committed to shopping centres as investment vehicles and are attracted by the opportunities to add value by active management and to the relatively good income returns still available. Although demand certainly outstrips supply, there doesn't appear to be the shortage of stock that some commentators have predicted".

Demand remains strong from a range of purchasers including institutions, property companies, private equity buyers and geared vehicles. There has been some yield compression in particular the margin between prime and secondary shopping centres, with the latter changing hands for around 6%.

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