Deals flow out of town
Published: 24 October, 2016
Retail warehouse transaction volumes hit £754m in Q3
Retail warehouse sales reached £754m in the third quarter – the highest quarterly total to-date in 2016 as activity returns to the market, according to Cushman & Wakefield. An additional £394m of warehousing is currently under offer with a further £900m being marketed, pointing to a positive end to the year.
Despite this, the recovery in transactions since June’s referendum vote to leave the EU has not been robust enough to make up for the subdued market conditions during the first half of the year. Total transactions of £1.73bn for the first three quarters of 2016 are down 33 per cent compared to the same period for 2015.
The largest investment transaction of the quarter was BMO’s purchase of the British Land portfolio for £191m reflecting a net initial yield of 6.25 per cent. ARES’ £58.40m purchase of Castle Vale retail park in Birmingham from M&G reflected a yield of 6.59 per cent while LxB sold the B&Q unit on Bugsby’s Way in Charlton to Weybourne Investments for £43.30m off a yield of 4.90 per cent.
Jonathan Rumsey, Head of UK retail market analysis at Cushman & Wakefield, said: “Although volatility remains following the EU referendum result, consumer confidence is back to pre-Brexit levels and retail sales are showing strong growth. Following a minor blip in June and July, retail park footfall returned to positive growth in August while vacancy rates continue to fall. With Investor confidence improving and a large volume of stock on the market, Q4 transaction volumes should surpass the Q3 level.”