Total UK shopping centre investment transactions completed during the first quarter of 2013 will hit £1.05 billion, according to data released today by Cushman & Wakefield.
This quarter’s figure is marginally down on the £1.17 billion seen in Q4 2012 but activity has increased notably and the number of transactions has spiked from six in the last quarter of 2012 to 14 in Q1 2013. Volumes in the first quarter of 2013 are also up by around 65% when compared to the £610 million-worth of deals completed the same period last year.
In the most significant transaction of 2013 so far, Cushman & Wakefield advised Legal & General on the sale of Midsummer Place, Milton Keynes to Intu for £250.5 million (5.01% Net Initial Yield). This sale produced one of the sharpest yields seen since 2007 and the purchaser was able to exchange contacts within three weeks of agreeing terms.
Cushman & Wakefield also advised Wereldhave on the sale of its two prime shopping centres in Poole and Ealing. Legal & General acquired Poole for £57.7 million (7.63% NIY) and British Land acquired the Ealing site for £142.5 million (6.90% NIY).
Other significant transactions this quarter include the sale of Grosvenor’s three schemes in Grimsby, Burton and Inverness to F&C REIT for close to £250 million (8.00% NIY) and Sovereign Land/AREA’s purchase of Lion Walk, Colchester from LaSalle for £55.6 million (7.50% NIY).
Prime centres currently under offer include the Friary Centre in Guildford, Centre:MK in Milton Keynes – both advised by Cushman & Wakefield – and the Southgate Centre in Bath. In total, there are 11 schemes currently under offer with a combined value of £688.7 million.
Charlie Barke, Head of Shopping Centre Investment at Cushman & Wakefield, said: “There have been over £1 billion-worth of shopping centre transactions in Q1, headed by our sale of Milton Keynes at close to 5.0% NIY.
“It is very encouraging to see this weight of demand for the sector and especially encouraging to see purchasers motivated to exchange contracts within just a few weeks of agreeing terms, as happened with our sales in Milton Keynes, Ealing and in Poole.
“Following on from the successes of Q1, we anticipate plenty of activity in Q2. We have a number of strong centres to bring to the market and anticipate good interest in these from a range of domestic and global investors.”