Shopping centre investment volumes are on track to surpass the record levels seen in 2013, according to latest data from CBRE. To date, £3.1 billion of shopping centres were transacted, comfortably exceeding the Q3 2013 figure of £2.7 billion.
With a further £0.7 billion currently under offer, Q1-Q3 2014 looks set to far exceed the transaction volumes witnessed in the same period last year and moves closer to the £4.2 billion transacted in 2013.
UK REITs have been the most active investors, accounting for 51% of transactions by price; this is in contrast to previous years where they have accounted for around 30% of the market. The £1.6 billion spent by the UK REITs on shopping centres was spread across only four transactions with a large average lot size of £400 million.
UK Institutions are the next largest investors into shopping centres, accounting for 24% of transactions, across 11 deals. In contrast to the REITs, the average lot size for UK Institutions was considerably lower at £60 million.
So far this year, foreign investment into shopping centres has been low compared with previous years, accounting for just 11% year to date compared with approximately 30% in 2013.
Rhodri Davies, Head of Shopping Centre Investment at CBRE, commented “UK REITs currently account for a large proportion of transactions this year, over half the market; however, this is skewed by a small number of large transactions including the purchase of the 30% stake in Bluewater by Land Securities. We expect this percentage share to be more balanced by the year end, closer to the 30% seen in previous years.