The overall turnover in the nine months to the end of September 2006 totals £4.4bn with the third quarter showing an almost 50 per cent increase in transactions on the previous quarter. The average capital value has been £61m, and 22 per cent of transactions have been £100m or over.

There is strong demand for centres that dominate their immediate catchment with zone A rates per sq ft ranging between £40-100 and offering genuine development opportunities. This demand is reflected in 87 per cent of transactions in 2006 traded at yields of under 6 per cent.

Nick Hart, Savills' head of shopping centre investment, said: "Despite overall trading volumes being down by £1.2bn for the same time in 2005, property companies and private Irish investors continue to dominate the sector, accounting for just over 75 per cent of all transactions.

"The demand for centres dominating their immediate catchment together with genuine development opportunities are being particularly competitively sought by investors."

Savills forecasts that a good volume of stock is expected to enter the market in Q4, which suggests that the run-up to Christmas will be busy. This should be further augmented by consumer confidence returning in line with the improved housing market and an increase in consumer spending over the next 12 months.

On the occupational side, Savills says large, well proportioned, efficient space is generating worthwhile occupational demand even in secondary towns and established but secondary locations. Retailers actively looking for such space include New Look and TK Maxx.

However, demand for standard shop units in the 1,200 sq ft to 2,500 sq ft size band is weakening and this is contributing to voids remaining at recently opened shopping centres such as the Frenchgate extension in Doncaster and Drake Circus in Plymouth.

The traditional anchor store market is very thin, but new innovative anchors are emerging including larger Primark and Next stores.

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