Investment in UK shopping centres fall in 2015
This year saw less investment in shopping centres in the UK than the previous, down to £4.3bn from £5.3bn, according to research from CBRE.
Investment in UK shopping centres in 2014 hit a nine-year high, but 2015 failed to live up to it due to a lack of a "super regional transaction", usually favoured by real estate investment trusts (REITs). This year, REITs made up a very small part of the market.
Private Equity accounted for 46% of all acquisitions across 26 transactions in 2015, and UK institutions for 26% across 13 transactions
Tim Williams, Director of Retail Capital Markets at CBRE, said: “There are still key deals worth in excess of £600million set to complete before the end of the year including Grand Central in Birmingham and Festival Place in Basingstoke.
“While the forecast for total investment is healthy, we won’t be seeing the sort of volumes we saw in 2014.
“This year we’ve also seen a shift in buyers with Private Equity funds dominating as they look to crystallise profits made over the last few years, where they’ve benefitted from significant yield compression.”
Though the total volumes of transactions are down, the demand for Prime continues at a pace. Williams added: “With the pricing of prime property bearing a relation to Government bonds yields, which too are trading at historically low levels, prime shopping centres offer an attractive margin, especially with an improving occupational market and real rental growth prospects.”
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