Modest Q2 for shopping centre investment – Knight Frank
Knight Frank says there may be more activity in the UK shopping centre market from September as there is a considerable weight of money focused on this sector. The second quarter saw modest levels of activity, with a notable trend being the withdrawal of unsold centres with little or no replacement stock.
In the second quarter just eight shopping centres were transacted with a total value of £385m, the firm notes, which is down 8% from the previous quarter and 6% lower year-on-year. The key deal in Q2 was the purchase by Capital & Regional of the Kingfisher Centre retail property in Redditch for £130m. The quarter also saw the sale of The Mall in Norwich and the Broadwalk shopping centre in Edgware – both lot sizes were over £60m and had net initial yields of 7.75% and 6.00% respectively, the firm notes.
Shopping centre assets available at the end of the second quarter were predominantly secondary and relatively small centres, “with the notable exception of Meadowhall and The Lanes Shopping Centre in Carlisle, which we understand is under offer at around £65m,” Knight Frank added.
Bruce Nutman, partner, head of retail investment at Knight Frank, said the drop in investment volume reflected several factors, including a lack of prime stock, a gap in the pricing expectations of sellers and buyers on secondary assets, and the continuing challenge of obtaining finance. “Encouragingly, prime shopping centres are still seeing good demand whilst supply remains insufficient,” he added.
