Prime yields harden
Published: 01 September, 2010
Yields for prime assets improved to 5.5 per cent over the second quarter of 2010, reflecting the fact that shopping centre stock has been relatively limited. Yields for smaller and more secondary assets have remained relatively static with vacancy rates and falling rents continuing to suppress values.
Just under £1,100m of schemes are on the market including the Ewart properties in Hammersmith, Victoria and Fulham Broadway with an asking price of £295m and a 5.63 per cent yield. A number of smaller schemes are on, or are coming to, the market. These include schemes in Ayr, St Austell and Dunstable.
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.
Charlie Barke
Head of retail investment
Cushman & Wakefield
