CBRE predicts strong retail investment market
Published: 26 March, 2010
The rebound in the UK retail investment market is expected to maintain momentum throughout the first half of 2010 according to latest research from CB Richard Ellis.
While the shopping centre development pipeline is at its lowest level for over 15 years, CBRE predicts that increased institutional money in the sector, particularly for smaller schemes, is expected to help maintain the downward trend in yields.
However the agent warned that the sector is expected to be subject to a wide divergence in the performance of individual assets with a number of secondary centres facing declining rents, increasing rates of tenant default and growing structural vacancies. At the same time dominant centres are expected to consolidate their market position.
And retail warehousing could see lower returns, CBRE forecast. “After the exceptional performance in the latter part of 2009, the sector’s returns are anticipated to moderate in the short term as relative pricing has become less attractive.” warned the agent.
Stewart Colderick, executive director of retail investment at CBRE said: “The first half of 2010 will see continued momentum in the retail investment market and while we expect rises in values to be moderate, there are opportunities in all retail sub-sectors provided we look beyond headline pricing and fully understand what is at the heart of it all – the retailers and their requirements. “
And he added: “With the retail sector leading the recovery in investment markets, CBRE predicts total property returns in the mid-teens for 2010 with retail forecasts predicted to perform somewhat more strongly.”
