Investor appetite for retail warehouses remains robust. Transactions exceeded £1 billion across 52 deals during the first half of 2014. This compares with £884m across 28 deals in the first half of 2013, representing a 19% increase. Almost £500m has transacted in Q2 across 21 deals, although this is slightly below the £550m transacted across 30 deals in Q1 2014. Nevertheless, there are currently 16 deals, equating to £644m, under offer (of which c. £350m is Fosse Park). This reflects the substantial volume of stock that has been offered to the market. However, given the strength of investor appetite we expect a large volume of stock to be traded in H2.
There are good levels of liquidity at all lot sizes and yields for all sub sectors have been trending inwards. We are continuing to see prices for both prime and secondary stock rise. Investors are anticipating improving occupier demand in light of better economic conditions, especially in the South East.
Source : DTZ (Groupe UGL)