Q1 DEALS: UK mall investment slowest quarter for 2 years

Just over €1 bn of UK shopping centre investment transactions completed during the first three months of 2015, making this the slowest quarter in the last two years, according to Cushman & Wakefield.

Overall the UK market saw 16 transactions totalling £722 mln (€1 bn) during Q1, a 60% decrease compared to the year-earlier period. In fact, Q1 2015 has been the quietest quarter for more than two years, Cushman & Wakefield said.

The largest single transaction in the quarter was Gingko Tree’s acquisition of the 50% share in the Bentall Centre, Kingston for £190 mln, reflecting a net initial yield of 4.70%. Cushman & Wakefield advised InfraRed and Hark in the second-largest transaction, involving the purchase of St George’s Shopping Centre in Preston from Aviva Investors for £75 mln, reflecting a net initial yield of 6.30%.

Other notable deals last quarter included Vixcroft and Cheyne Capital’s purchase of the Nicholson Centre in Maidenhead for £37 mln (NIY 6.15%) and Helical’s sale of Clydebank Shopping Centre to Cerberus and Edinburgh House for £70 mln (NIY of 7.25%).

Currently, there are 13 shopping centres under offer, with a combined quoted sales value of £520 mln. There are 10 shopping centres and three portfolios on the market with a combined quoting price of £1.2 bn.

Charlie Barke, Cushman & Wakefield’s head of UK shopping centre investment, said: 'Investment demand remains buoyant but supply remains very constrained. We foresee that dynamic continuing over the next six months at least. Retail yields still look attractive compared to the other sectors and the diversity and depth of capital looking at the sector provides us with great confidence for the rest of the year.'

Cushman & Wakefield recently launched two key sales: The Grafton Centre in Cambridge, on behalf of M&G with a quoting price of £92.5 mln and the recently rebranded N1 scheme in Islington, Angel Central, for which the guide price is £140 mln.