Shopping centre yields harden
Published: 30 July, 2010
Prime yields on shopping centre investments fell in the second quarter of 2010, as investment demand exceeding supply, according to Cushman & Wakefield
Cushman & Wakefield calculates that £673m of shopping centre investments changed hands between April and June 2010, a similar level to the previous quarter. But the number of individual transactions was down.
Yields for prime assets improved to 5.5 per cent over the quarter, reflecting the relatively low amount of stock on the market, but yields for smaller and more secondary assets have remained relatively static with vacancy rates and falling rents continuing to suppress value.
Key deals in Q2 2010 included the acquisition of NI Islington by Warburg-Henderson; the purchase of The Mall centres by Rockspring; Land Securities’ purchase of the 02 Centre in Finchley; and Meyer Bergman’s purchase of The Exchange, Ilford.
Just under £1.1bn of schemes are currently on the market including Ewart’s properties in Hammersmith, Victoria and Fulham Broadway with an asking price of £295m, yielding 5.63 per cent. A number of smaller schemes are on, or are coming to, the market. These include schemes in Ayr, St Austell and Dunstable.
Charlie Barke, head of retail investment at Cushman & Wakefield said: "The first half of the year has seen significant yield improvement across the sector, fuelled by investment demand exceeding supply. Looking ahead, demand looks a little thinner and supply appears to be increasing. While prime stock will probably hold up reasonably well, we are concerned about a potential slip in secondary values as the year draws to an end."
