Forty four UK high street retail assets outside Central London were transacted for a combined £255 mln (€323 mln) in the first quarter of 2016, according to new research published by agent Cushman & Wakefield.
The figure is, however, 10% lower compared to the same period a year earlier, a sign that Brexit concerns are having an impact on the sector.
'The UK high street investment market remains relatively buoyant,' said Chris Lewis, head of high street investment at Cushman & Wakefield. 'The EU referendum has perhaps slowed the market a little, but many investors are unfazed, seeing the current market as an opportunity to buy with limited competition, or to sell into a market scarce of stock. Consequently the vote is having far less impact than in other sectors with sales increasing as the quarter wore on – with the majority of larger transactions going through in March.'
Cushman & Wakefield acted on the largest transaction of the quarter (excluding Central London), the acquisition of 61-96c Queensmead, Farnborough, for £17 mln reflecting a 7.70% net initial yield (NIY). Other notable deals include the acquisition of 7-19 Amhurst Road, Hackney, by TH Real Estate for £13.5 mln (5.88% NIY) and the sale of 42-48 Market Street, Manchester, by Canada Life Investments for £13 mln, showing 4.14% NIY – a new benchmark yield for metropolitan centres.
Institutions were the largest purchasers in Q1 2016, accounting for £91 mln (37%) of all acquisitions, followed by property companies, accounting for £65 mln (27%) of acquisitions. On the seller side, property companies took the lead, disposing of £64 mln (26%) of high street stock. Institutions came a close second, selling £57 mln (23%).
