Shopping centre investment totalled at £2.7 billion in the first three quarters of 2013, going beyond the total figure recorded for the whole of 2012, according to a new report by DTZ.
The first eight months of the year saw transactions across 49 shopping centres, compared to the 29 in 2012, which totalled at £2.5 billion. Looking at the third quarter of 2013 particularly, 14 shopping centres at £498 million were taken up, while another 16 centres at £716 million are currently under offer.
Analysts expect that the 2013 total will be dramatically higher than last year's, especially when considering that another 25 centres, valued collectively at £1.7 billion, are being prepared for the market. The long-term yearly average for the sub-sector may be £3.6 billion but this year is set to exceed expectations by a considerable margin.
A highlight in the third quarter was British Land's take-up of a 50 per cent stake in Southgate in Bath for a reported £101 million. Other notable transactions within the period included The Mall Pavilions in Uxbridge sold to La Salle IM for £64.5 million and M&G Real Estate’s purchase of Gracechurch Centre in Sutton Coldfield for £88 million, with a net initial yield of 7.7 per cent and 7.75 per cent respectively.
When it comes to prime, secondary and tertiary yields, they remained stable in the third quarter of 2013, but there was inwards movement for 'super prime' shopping centres to five per cent/5.25 per cent and dominant secondary sites to 7.25 per cent/eight per cent. Both suggest an increase in optimism among global investors.