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Think/Retail Typology - September 2011 - UK Retail Property Investment Research

Report Authors: Henderson Research - Henderson Global Investors

Report Summary:

In the UK property investment market, we have seen outperformance of the retail sector versus its office and industrial counterparts in terms of wealth preservation and real capital growth over a long term period, starting from 1970.

Henderson Shopping Centre typologies have highlighted that historically Small Prime centres have reported strong returns of approximately 10% per annum over the last 16 years. Moving forward, we believe that this outperformance could well continue given the opportunity for rental growth afforded by smaller schemes with a constrained supply of units, provided they form the prime part of a wider retail offer such as a smaller town centre scheme in a top UK town.

The UK, however, has been moving into a retail environment dominated by large schemes. The latest development, Westfield Stratford, which opened on 13th September 2011, is being marketed as the largest urban shopping centre in Europe. Recent studies have shown that retailers can now trade from approximately 80 key centres and continue to capture the majority of UK retail spend. As a growing proportion of spend is also channelled into new forms of retailing, such as e-tail and m-tail (mobile phone applications), retailers will no longer search for numerous locations within one town and will reduce the number of towns they wish to trade from. The importance of key retail locations is increasing; retailers will pay higher rents for centres which have large expansive catchments and continuous high levels of footfall.

About the Author:

Henderson Global Investors is an international investment company, with a strong reputation and a proud history, going back to 1934. We currently manage £74.4 billion and employ more than 1000 members of staff worldwide, of which more than 250 are investment professionals.

Our research department provide investors with the information, resources and the infrastructure they require.

As a pure asset management house, Henderson Global Investors know what investors want from us: to help them achieve their investment objectives by delivering performance that meets their expectations.