Shopping centre investment volumes down 30.2%

  Investment in UK shopping centres in 2016 totalled £3bn, 30.2% lower than last year’s total of £4.3bn. The 2016 total is a 25% drop from the long-term average of £4bn, according to Savills. Key transactions of the year included Hammerson’s £335m purchase of Grand Central, Birmingham; APG’s purchase of Edinburgh St James; and intu’s £410m purchase of Merry Hill. Forty-two shopping centre transactions completed in 2016, less than half the total for 2015, during which 86 deals completed, and well under than the long-term average of 78. Councils emerged as key players in 2016, making £386.7m worth of acquisitions across 10 schemes.  These transactions accounted for 13% of all UK shopping centre deals in 2016 and 44% of deals below £100m. Non-domestic investors accounting for £1.35bn of total transactions. Interest came predominantly from Europe, the Middle East and the US. The third quarter of 2016 was the quietest quarter on record, with just £111m of shopping centres traded. However, the fourth quarter saw volumes return to a robust £1.27bn. This is broadly in line with the long-term average for the quarter and comparable to £1.35bn traded in Q4 2015. Mark Garmon-Jones, head of shopping centre investment at Savills, said: “The UK shopping centre investment market had an unusual year in 2016.  The impact of wider themes including the result of the EU referendum meant that the third quarter was particularly quiet. The final quarter saw investment volumes return to near-normal levels. We expect this momentum will continue into 2017. However, investors have one eye on the Brexit negotiations and the other on retailer performance.” • To send feedback, e-mail amber.rolt@estatesgazette.com or tweet @amberrolt or @estatesgazette