There is evidence that the shopping centre investment market in the UK is picking up. According to the latest report from Knight Frank into the state of the sector, the value of transactions completed in the third quarter of this year was almost double that in the three months from April to June. In total, GBP 710 million worth of assets were sold between July and September, compared to GBP 390 million in the previous three-month period.
Supply is falling, the organisation found, adding that "buying opportunities for prime assets remain scarce". However, there are indications that a greater number of "bank-driven non-performing loan portfolio sales" will occur in the final quarter of this year, as well as "some reweighting of large institutional portfolios", both of which will present some "interesting" real estate investment opportunities to those who are active in the market. It is not only in the UK where activity in the shopping centre investment sector has picked up, with Savills highlighting Germany, France, Norway and Sweden as other destinations that are attracting attention from investors.
European research director at the firm Lydia Brissy commented: "Countries with proven consumer spending resilience or prospects remain the preferred destinations, although trophy assets located elsewhere are becoming popular." Romania, Poland, Hungary, the Czech Republic and Austria were named by the firm as the top five European destinations for opportunistic investments in the first half of this year. Nearly three-quarters of all the shopping centre transactions completed in the continent in the first six months of 2012 took place in the UK, Germany or Poland, the Savills research revealed.
Looking forward, the organisation predicted that investors will continue to focus on core assets into 2013, due largely to the ongoing eurozone crisis and uncertainty surrounding a possible resolution. The firm also expects more investors to embrace opportunistic investments outside of these core areas, particularly in Poland, the Czech Republic and Romania, because the economies in these nations "recover fast" and strong retail sales growth is anticipated.