Investment in UK shopping centres fell by nearly 75% in 2008 to only £1.47bn, according to Cushman & Wakefield’s latest report.
The figure is down from 2007’s figure of £5.47bn.
2004 was the record year for investment in UK shopping centres with £7.84bn invested. 2008’s total represents just 19% of this figure.
But Cushman & Wakefield predict 2009 will see investment activity increase as investors ‘identify relative good value in the sector.’
The last quarter of 2008 saw only two notable transactions – the newly built and 85% let Eagles Meadow, Wrexham which was purchased for £80m by LaSalle Investment reflecting a yield of around 7.5%.
The second was Doughty Hanson’s purchase of Old George Mall, Salisbury from Prupim, also reflecting a net initial yield of around 7.5%. This compares with five major deals totalling £491m in quarter three.
David Erwin, CEO of capital markets in the UK at Cushman & Wakefield, said: ‘Yields have moved out on shopping centres to the extent that they generally represent good value and a good buying opportunity for those with equity or financing in place. There are a number of major deals in the pipeline which are likely to complete in this quarter and from these we should get a clearer picture of the strength of the market for prime centres.
‘There are a number of secondary centres, however, which have come to market and which will struggle to find buyers in the short to medium term. Concerns over the tenant market limits investors’ interest in these schemes.’