Savills predicts year-end flurry of UK mall deals

The UK shopping centre investment market is set for an extremely busy finish in 2011, according to Savills.

The international real estate adviser reports that there were just 10 shopping centres deals accounting for £501 mln (EUR 571 mln) in the second quarter of 2011. But there are currently 25 shopping centres under offer with a further 17 in the market.

Savills expects the year end transaction figure for this sector to be in line with the firm's prediction made at the beginning of 2011 of £5 bn.

In terms of demand Savills confirms that there are currently approximately 80 shopping centre requirements in the UK combined with an increase in the number of overseas/sovereign wealth fund investors seeking prime and 'super' prime assets.

Savills report notes that the average initial yield for shopping centres transacted in Q1 2011 compared to Q2 2011 dropped significantly from 7.84% to 7.32% respectively reflecting the improved quality of asset being traded.