Investment volume falls further
Published: 20 July, 2009
The volume of shopping centre investment activity continued to fall in the second quarter of 2007, according to new research from Knight Frank, with just £175m of deals going through the market against a long-term quarterly average of £1.3bn.
Only three deals were completed, the biggest being Birmingham City Council’s purchase of the Pallasades centre in Birmingham from Warner Estate for £91m, off a 7.25 per cent initial yield. And Land Securities sold Fremlin Walk in Maidstone to Europe Capital for £69m reflecting an initial yield of 8.35 per cent.
However the picture is brighter for the third quarter with four centres already under offer. USS has bought Grosvenor’s 20 per cent stake in Grand Arcade, Cambridge for £22.5m and Aviva’s 50 per cent stake in the Bentalls Centre, Kingston, is under offer to Meyer Bergman for £105m, showing a 7 per cent initial yield.
Knight Frank investment partner Geoff Ford said that the attractive pricing of good quality assets was tempting more buyers into the market, including a number of opportunity funds. This, combined with a shortage of stock, is likely to bring about a stabilisation, and perhaps even a hardening of prime shopping centre yields over the next six months, he forecast.
