Shopping center investments reach £2.73bn for UK h1

Transaction volumes for UK shopping centers reached £2.73bn for 28 centers during H1/2014, way up on H1/2013 of £2.23bn.  During Q2/2014, 15 centers transacted for £1.42bn, the same as Q1/2014 of £1.31bn for 13 centers. The largest deal during 2014 was the sale of the 30% Lend Lease share in Bluewater Shopping Center, Dartford.  It accounted for 49% of the overall volume during Q2.

Eight centers had offers by the close of Q2, to a total value of £800m.  This includes 50% in Cabot Circus, Bristol for £270m with NIY of 6.25% reported in Q1, and 50% in Telford Shopping Center for about £200m, with NIY of 6%.  Currently, 31 centers are being marketed openly to a value of £1.23bn, showing a good available stock level.  These are mostly small or large lot sizes and portfolios.  A lack of stock exists with prices between £20m and £50m and the demand for such lot sizes is strong among property companies and UK retail funds.  Stock is expected to continue attracting competitive bidding.

The current weight of money has hardened yields in Q2/2014 for all center sub-sectors and the inward trend is continuing.  Super-prime yields are no at 4.5%, supported by Bluewater’s 30% transaction at the end of H1.