Investment market slowdown continues

Only £337m invested in UK shopping centres in first quarter of 2018

Investment into UK shopping centres reached £337m across 11 deals in the first quarter of 2018, according to Savills. Turnover is down 9 per cent year on year although the deal count is up on the eight recorded in Q1 2017
Savills commented that the lower levels were driven by a series of retailer administrations which has had an impact on the market.

Notable transactions in the first quarter included Canterbury City Council’s acquisition of TH Real Estate’s 50 per cent stake in Whitefriars, Canterbury for in excess of £75m and British Land conditionally exchanging contracts to acquire Royal Victoria Place in Tunbridge Wells from Hermes for £96m.

Councils have again been the most active buyers in the market, accounting for £155m of deals across five transactions, a total of 46 per cent of total investment volumes.
Savills highlights there are currently 13 schemes worth £874m under offer and another 19 schemes worth £1.5bn on the market. AS a result Savills is predicting full year volumes should get close to £2.5bn, above the £1.7bn recorded in 2017 but below the long term average of £3.9bn.

Mark Garmon-Jones, head of shopping centre investment at Savills, said: “This quarter has been an interesting one in the shopping centre market with the flurry of corporate M&A activity and retailer CVA activity making headline news, as well as creating uncertainty. There have also been several high-profile deals as investors seek secure prime assets located in the south east and key regional cities, something we expect to see continue to the end of the year. This will be alongside investors focussing on convenience and needs-based schemes or repurposing opportunities.”

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