The UK shopping centre investment market last year saw the highest level of activity since 2006.
According to CBRE, £4.2bn of transactions was completed in 2013, an increase of 81% on the £2.3bn of shopping centre sales agreed in 2012 and a 35% increase on the long-term average, since 2006, of £3.1bn. Up to £5.4 bn of shopping centres were sold in 2006.
Last year’s total volume did not include super-regional shopping centre transactions, which typically distorts volumes.
In total, 54 deals were completed in 2013 compared with just 29 in 2012. The long-term average since 2006 stands at 43 transactions per annum.
Notable mall transactions in 2013 included Aviva’s and Hammerson’s sale of the Queensgate Centre in Peterborough to Invesco for £200m, a net return of 6.25%. Multi Developments sold its 50% stake in Southgate , Bath, to British Land for £101m, a 5.8% equivalent yield. And Aviva Investors sold Mell Square in Solihull to IM Properties for £44m, a 7.4% net initial yield.
Institutional investors were the most active buyers, accounting for 41% of the shopping centre market in 2013. REITs were the second-most significant investor, accounting for 38%. Property companies and opportunity funds accounted for 27%.
Shopping centres continued to attract interest from foreign investors ,with 39% of the buyers from overseas; the largest of these were North American investors, which accounted for 23% of the market.
Rhodri Davies, head of shopping centre investment at CBRE, said: “The attraction of the UK retail market continues to catch the eye of the international equity, with the investors coming from a variety of locations.
“We predict this trend to continue in the coming year. With over £700m currently under offer and circa £850m currently on the market, we expect last year’s volumes to be matched, if not beaten, in 2014.”