UK Shopping Centre Investment set to soar in Q4 2015
In September, Britain’s shop vacancy had fallen to 12.9% which is the lowest figure since April 2010. The main change was the continued fall in the shopping centre vacancy rates dropping by -0.9% compared to the previous year’s figures, with no region seeing an increase.
Matthew Hopkinson, director at The Local Data Company commented: “Clearly this is very good news that vacancy rates are at their lowest level for over five years. There are a number of reasons for this and these will vary by specific location but ultimately consumers have more money in their pockets as a result of wages being higher than inflation, employment levels are improving and there is greater focus on the living wage as well as zero hours contracts.”
According to research from Cushman & Wakefield, the total investment volume for shopping centres in 2015 so far is £3.09bn. Cushman & Wakefield were involved in three of the largest transactions in quarter 3 of 2015 which included the sale of Angel Central, Islington (£171m), the purchase of Eastgate Shopping Centre in Inverness (£116m) and the sale of Houndshill Shopping Centre in Blackpool (£100m). Quarter 3 saw a total of £1.17bn worth of shopping centre assets transacted across 18 deals.
Angel Central, Islington
A strong final quarter for the UK shopping centre investment market has been predicted by Savills, with total transaction volumes set to match last year’s total of £6.4bn. This means that nearly double the amount already transacted will need to be made, however Savills believe numbers will significantly rise before Christmas with 23 schemes under offer. The under offer schemes are worth circa £1.29bn and there are a further 44 in the market worth circa £2.17bn.
According to Cushman & Wakefield, demand for smaller secondary centres has improved partly due to the improving economy but also due to changing consumer trends and store formats. Retailers in all markets are also looking to improve their convenience offer to consumers.
Six new schemes and four extensions are due to be completed next year. An exciting addition of the 450,000 sq ft Victoria Gate shopping centre in Leeds is leading the way alongside a new development in the South East totalling 300,000 sq ft anchored by a 120,000 sq ft John Lewis.
Victoria Gate Shopping Centre, Leeds
Justin Taylor, the Head of EMEA Retail, said: “It is becoming increasingly clear that those shopping centres that offer convenient, well located establishments providing a ‘destination’ appeal, complete with leisure components and all a shopper could need under one roof, are the winners of the future.”
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