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Outlook good for Q1 UK shopping centre investment

Sixty-five UK shopping centre transactions totalling GBP4.01 billion either completed or exchanged in 2015, of which GBP876 million was transacted in the fourth quarter of the year and the outlook for Q1 2016 is positive.

Cushman & Wakefield acted on three of the largest transactions in 2015, and was involved in 38 per cent of transactions above GBP100 million. These included the sale of Angel Central, Islington, for GBP171 million, reflecting a net initial yield (NIY) of 4.10 per cent, the purchase of Eastgate Shopping Centre in Inverness on behalf of Harbert for GBP116m (6.50 per cent NIY) and the sale of Houndshill Shopping Centre, Blackpool, on behalf of Blackstone and Catalyst Capital for GBP100m (6.17 per cent NIY).
Barry O’Donnell, Head of Shopping Centre Investment at Cushman & Wakefield, says: “We predicted back in January 2015 that shopping centre investment volumes for 2015 would be lower than 2014 but higher than the 10 year average. This has proven to be the case. A prediction for 2016 is tougher to call. The first quarter will be strong with some big deals set to close in Glasgow and Birmingham. However, achieving another GBP4 billion plus year will be tough as fewer quality centres become available and some vendors will hold rather than sell if their pricing aspirations are not met.”

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