UK shopping centre investment bounces back

Published:  25 January, 2017

Savills report shows fourth quarter return of £1.27bn

The total amount invested into UK shopping centres in 2016  reached £3bn, according to international real estate advisor Savills.  The firm notes several large transactions, increased purchasing activity from councils and a rise in non-domestic investment all contributed to the sector’s bounce back in the latter part of 2016 after a slow start. This compares to a total of £4.3bn in 2015 against a long term average of £4bn per annum.

Savills highlights Hammerson’s £335m purchase of Grand Central, Birmingham, APG’s purchase of Edinburgh St James and intu’s £410m purchase of Merry Hill, Dudley as 2016’s largest transactions. 42 shopping centre transactions completed in 2016, compared to 86 in 2015 and a long term average of 78. 

The firm also reports that, while councils did not purchase a single shopping centre in 2015, they emerged as key players in 2016, making £386.7m worth of acquisitions across 10 schemes. 

Mark Garmon-Jones, head of shopping centre investment at Savills, comments: “The UK shopping centre investment market had an unusual year in 2016.  The impact of wider themes including the result of the EU referendum meant that the third quarter was particularly quiet, with only six deals totalling £111m completed. The final quarter saw investment volumes return to near normal levels. We expect this momentum will continue into 2017, however investors have one eye on the Brexit negotiations and the other on retailer performance.”

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