Shopping centre investment volumes slump
Published: 28 October, 2010
Despite slow sales through the summer a higher number of centres are now on the market
According to Knight Frank's latest quarterly buletin, a quiet summer for the investment market culminated in just two shopping centre sales transactions in the third quarter of 2010, compared with 15 in the previous quarter. The two deals amounted to £172m, taking the total turnover completed in 2010 so far to £1.45bn, broadly in line with the position in 2009.
Land Securities sold the Stratford Centre to Catalyst for £92.6m, reflecting a 7.25 per cent initial yield. And Delancey sold the arc in Bury St Edmunds to ING for £79.5m, reflecting a 5.6 per cent initial yield.
However there were £312m assets under offer at the end of the third quarter, which Knight Frank says illustrates the current strength of demand in the market. Assets under offer include Victoria Place, above Victoria Station where Network Rail has offered vendor William Ewart Properties £95m to show a 6 per cent yield. Soveriegn Land has Ayr Central under offer at £35m, yielding 6.25 per cent and Bridehall has bid £28m for White River Place in St Austell reflecting a 6.15 per cent yield.
The most striking development towards the end of the quarter was the sharp increase in the number of shopping centres available on the market, rising from 14 at the end of June to 34 by the end of September. The available shopping centres totalled £2.3bn in quoted sales terms, the highest level since Summer 2007.
Among the large centres recently hitting the market, Hermes is offering to sell its 7.5 per cent stake in Bluewater for £115.6m; Grosvenor is looking to sell its Dolphin Centre in Poole for £80m and Lloyds is driving the sale of Drake Circus in Plymouth for £230m.
