UK - Investors are holding off from acquisitions in the UK as shopping centre developments stall amid a funding crisis, according to two specialists at property consultancy Savills.

Director Nick Hart told IPE Real Estate, from the investment side, "it's tough very tough" as with just £300m (€381m) traded this year, transaction volume are at their lowest for 10 years.

"It'll pick up at the back-end of the year, I hope," said Hart. "The worst should be over by then."

However, he denied investors were leaving the UK retail market. "It isn't that they're leaving, it's just that no-one is coming in and that's because of the credit market," he said.

Meanwhile, Paul Wright, director of retail development at the consultancy, said market uncertainty, rather than the danger of over-supply, was grinding new projects to a temporary halt.  He cited a £230m (€293m) Modus development in Newport, Wales, which is currently scouting new sources of funding.

"These projects haven't been shelved, nor will they be because investors have spent money on them," said Wright. "Developers will look again at what's included in the package and they may be looking at phasing, rather than constructing the building in one go."

He added the Newport project was "reasonably well-let so far, adding "there's financing interest but there has been a delay. Modus is confident."

Although he stopped short of suggesting the credit crisis had weeded out the new entrants who have dominated the market in recent years, Wright said he welcomed the reappearance of experienced developers.

"New developers are less-experienced, and pricing allowed schemes to come in that wouldn't have been built otherwise," he said. "More experienced developers are better able to gauge value. People will have to look at what they've been doing and how they can improve profitability in the current market.

"It's interesting that old money is coming back into the market. Older, more experienced developers are looking to come back in," he continued.

Savills's analysis of the UK contrasts with the recent pan-European prognosis from René Tremblay, CEO of Ivanhoe Cambridge, the retail property subsidiary of the CA$237bn (€175bn) Québec public pension fund. Tremblay told a recent conference shopping centres would continue to attract cross-border property investments because they offer secure income and low risk compared to other assets.

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