Shopping centres outperform other real estate sectors, CBRE/IPD reports

The shopping centre sector last year outperformed the other real estate sectors in seven of the 13 countries surveyed in the third edition of the CB Richard Ellis/IPD European Shopping Centre Digest. In a further three countries, shopping centres were only outperformed by other retail property.

The situation for shopping centres was less rosy in the UK and Denmark in 2005, where the sector ranked behind almost every other sector of real estate, according to the digest which was published at the Mapic retail real estate event in the French city of Cannes on Thursday. The star performers in the digest were Ireland and France as they generated returns of 28.4% and 27.2% respectively. 'This is the third year in succession that Irish shopping centres have been the best performers in Europe, having topped the table in 2003 and 2004 with total returns of 24.1% and 18.1% respectively,' the report said.

The lowest shopping centre total returns in 2005 were generated in Germany (4.1%) and Switzerland (5.5%). The income returns in both these countries were only slightly below the European average. This was because of a lack of capital value growth that resulted in the poor overall returns, CB Richard Ellis said.

'Shopping centres in Europe continue to be a target for many investors and it is clear that demand is significantly higher than supply,' said Nick Axford, head of EMEA research and consulting at CB Richard Ellis. 'Investors are attracted not just by the high returns that the sector is currently generating, but also by the fact that strict controls on development in many countries mean that supply will remain constrained in the future.'