The pockets of opportunity for core retail investors in Europe are smaller today than they were a year ago, according to Mike Rodda, partner in charge of cross-border retail investment at Cushman & Wakefield. 'Today I would place a bigger question mark against parts of secondary locations in France. Core investors need to be more selective.'

The pockets of opportunity for core retail investors in Europe are smaller today than they were a year ago, according to Mike Rodda, partner in charge of cross-border retail investment at Cushman & Wakefield. 'Today I would place a bigger question mark against parts of secondary locations in France. Core investors need to be more selective.'

The divide between prime and secondary properties is also becoming more pronounced in the UK and Germany, he added. 'In Germany, there's still strong appetite for core locations, but less appetite for secondary. Until financing becomes more accessible and the income environment more stable, core investors will not look at anything that’s not prime.'

Rodda said yields for core shopping centres in Germany had fallen below 5% in some locations. 'We're seeing very aggressive pricing for Germany.'

Central London is 'incredibly sought after', he added. The lowest yield reportedly seen in the UK capital involved the sale of the Lumina building on Oxford Street to Spanish retailer Inditex for EUR 190 mln, or a yield of 3.7%. The vendor was German open-ended fund manager Deka Immobilien.

Prices are also aggressive in northern Europe, but the Nordics are overall a better proposition, Rodda noted, despite the fact that the market is dominated by local pension funds. 'Some foreign investors are spending more time on a market like Denmark,' he said, pointing to Meyer Bergman. 'Denmark is more stable than many other markets today. Sweden is also very attractive, and Norway is becoming increasingly attractive as well.’

London-based Meyer Bergman reportedly outbid domestic investors with the purchase of a prime high-street retail property in central Copenhagen in September. The deal, representing an investment of EUR 34 mln, is believed to reflect a net initial yield of just over 5.5%.

Rodda said Poland was also a better bet than some of the other core countries in Europe. 'Poland was hotter last year than this year, but it's still liquid.'