Jul 10, 2015
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UK shopping centre investment volumes predicted to hit £6.5bn

Jul 10, 2015

Global real estate services provider Savills has forecast an increase in total transaction volumes in the UK shopping centre market.

Dundrum Shopping Centre, Dublin

Savills is predicting that volumes could rise to £6.5bn by the end of 2015, an increase from £6.44bn in 2014. In the first half of the year, £1.634bn were transacted across 32 deals, but this looks set to increase in the second quarter with 28 shopping centres under offer (worth c.£1.25bn), 48 in the market (worth c.£2.24bn) and 18 being prepared for sale (worth c.£750m), the company said.

Increased demand and the sector's popularity with investors has led average net yields to fall from 8.02% to 7.21% year-on-year. The recognition among investors of the premium value of shopping centres in London has also led to "extremely strong bidding."

Nick Hart, head of UK and European shopping centre investment at Savills, comments: “There are a number of significant disposals coming through such as Dundrum Shopping Centre in Dublin, Festival Place in Basingstoke and a stake in Birmingham’s Merry Hill which we believe will see transaction volumes rise to 2006 levels before the end of this year.”

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