Quiet summer for UK shopping centre investment

The headline deal in Q2 was Capital & Regional’s £130million acquisition of the Kingfisher Centre in Redditch. Other key transactions included the sale of The Mall in Norwich and Broadwalk shopping centre in Edgware; both lot sizes were over £60million and had net initial yields of 7.75% and 6.00% respectively.

The available assets at the end of Q2 are predominantly secondary shopping centres and relatively small lot sizes, with the notable exception of Meadowhall and The Lanes Shopping Centre in Carlisle which we understand is under offer at around £65million.

Knight Frank pointed out that investors continue to factor in the euro zone crisis, concerns over the economy and the general health of the retail sector to their pricing.

Bruce Nutman, Partner, head of retail investment at Knight Frank said: "Several factors have contributed to the drop in investment volume including a lack of prime stock, a gap in the pricing expectations of sellers and buyers on secondary assets, as well as the continuing challenge of obtaining finance. Encouragingly, prime shopping centres are still seeing good demand while supply remains insufficient."

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