UK REITS Dominate Shopping Centre Investment Market
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.
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.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2013 revenue). The Company has approximately 44,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through approximately 350 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website at www.cbre.com.