Investment in supermarket property surged 80% to £1.78bn last year as confidence in the outlook for UK grocery retailers improved, according to Colliers International.
The jump in investment levels is in sharp contrast to other parts of the retail market which have suffered a slump in activity.
Colliers’ head of retail capital markets, Tom Edson, said: “Investors looking for property assets which offer solid returns underpinned by solid corporate covenants targeted the sector and took buying to levels that haven’t been seen since 2013.
“We have now seen capital market volumes in the sector of more than £1bn annually for the past decade. During a period when UK retailing – and the property market it supports – has continued to be the subject of negative sentiment, the grocery sector has been the stand-out performer.”
The publication of Colliers’ UK Grocery Real Estate Review comes on the same day as Supermarket Income REIT, the UK’s only listed company dedicated to supermarket property, published its half-year results.
The REIT reported 1.6% like-for-like growth in the value of its portfolio in the six months to the end of December, taking the total portfolio valuation to £490.4m.
The company also expanded through the acquisition of two supermarket assets for £114.8m in the period and raised £100m of fresh equity. NAV per share remained unchanged at 97p.