Investment market grinds to a halt

Published:  26 March, 2017

Only five centre sold in first quarter of 2017

Just five shopping centres were transacted in the first quarter of 2017, according to Knight Frank research, the largest deal being the Stratford centre in east London for £141.5m at a net initial yield of 5.25%.

Stephen Springham, Knight Frank’s head of retail research, said: “General market uncertainty was compounded by lack of supply and an ongoing disconnect between vendors’ and purchasers’ aspirations. But we expect to see stock and sales volumes improve in the latter part of the year, particularly as retail assets become cheaper and start to look increasingly better value relative to other property sub-sectors.”

On the occupational side, retail sales slowed down in Q1 from the unsustainably high levels in the second half of last year. There are also initial signs of price inflation in some retail sectors, but this is still at a very manageable level. The quarter1 also saw the first retailer casualties since the Referendum last year, in the shape of Blue Inc, Brantano and Jones the Bootmakers. But Springham said these were very much isolated, company-specific instances, rather than a sign of universal distress in the wider occupier market.

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