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Shopping Centre Investment Market has Exceptional Q4

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United Kingdom  Retail Investment  Knight Frank  Sheffield  Bruce Nutman  Shopping Centre Investment Volumes 

Shopping Centre Investment Market has Exceptional Q4

By - Friday 21 December 2012

More and more property investment deals are being brokered in the shopping centre market, according to a recent study. Knight Frank's Shopping Centre report revealed that the final quarter of 2012 was another high performing one for the sector, following up on a healthy Q3. Provisional quarterly transaction volumes are estimated to stand at approximately GBP 1.18 billion at the end of the year.

This figure largely exceeds that recorded in the penultimate quarter of the year and the result of Q4 2011. However, Knight Frank claim this exceptional performance is largely the result of the sale of Meadowhall shopping centre in Sheffield. What's more, the result of Q4 hasn't been enough to catch up to 2011's yearly total of GBP 3.36 billion. Transaction volumes for the year to date are projected at GBP 2.63 billion.

Currently, there are 14 shopping centres in the UK being openly marketed, posting a combined quoted sales value of GBP 954 million. This is in contrast to the six assets registering GBP 554 million marketed in Q3. The market is also filling up with more prime and quality assets, such as Midsummer Place in Milton Keynes and Ealing Broadway in Ealing, for sale at GBP 220 million and GBP 145 million respectively.

What's more, yields are performing well for prime and good secondary assets, enjoying a stable Q3 and standing at 5.5 per cent and eight per cent respectively in Q4. This paints a cautiously positive picture going into 2013, as the market gets back on its feet. Bruce Nutman, partner, head of retail investment at Knight Frank, said: "We expect 2013 to be a year of gradual recovery, with the occupational market showing tentative signs of increased demand for better quality units towards the latter half of the year.

"Investor appetite will remain robust for prime stock whilst improving sentiment is expected for good secondary stock with asset management opportunities. Prime yields are expected to harden during the year with sentiment deteriorating for the weaker secondary and tertiary product."

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