In a continuation of last quarter’s theme, turnover volumes have remained very low for the year to date, borne out of a lack of investment demand as opposed to a lack of supply. We expect that, with institutional cash seeking only the most prime assets, and limited investor depth in the market as a whole, the remainder of 2017 will remain challenging. There will come a point soon after, however, when relative to other sectors and other geographies, UK shopping centres will start to look attractive once again.
Total volumes this year are less than £720m, which, relative to average annual turnover in this sector of ca. £4bn, is exceptionally low. Those centres that have been marketed have often struggled to generate good pricing and that has deterred other owners from formally offering their schemes to the market. Where there have been exceptions and pricing aspirations have been achieved, individual buyers are often significantly ahead of market pricing and it remains
to be seen whether they perform. Many centres on the market have been out for a number of months, with some being re-priced, and others ultimately being withdrawn and many refinanced.
Source : Knight Frank