Completed UK retail warehouse transactions in Q2 totalled £635 million – a 33 per cent increase on the second quarter last year, according to research conducted by DTZ. The latest investment activity takes the half-yearly total to over £1.3 billion, 27 per cent up on transaction volumes in H1 2014.
In total there were 28 transactions completed during Q2, with the five biggest accounting for a combined total of £298.4m, 46% of the total transaction value.
The most expensive transaction was L&G’s purchase of Birstall Retail Park, Leeds for £110million. This was followed by Standard Life’s acquisition of Gateway Retail Park, Beckton (£47.75 million), Aberdeen’s purchase of Brislington Retail Park, Bristol (£47.35 million), the £47 million acquisition of Monks Cross Shopping Park, York by an overseas investor, and M&G’s £46.25 million purchase of Newcastle Shopping Park.
Funds continued to dominate acquisitions throughout Q2, accounting for 79% of purchases, with key contributors including L&G, Schroder’s, M&G and Standard Life. Funds also dominated the vendor profile, accounting for 61% of sales, with the key players including Aviva, Aberdeen and Threadneedle.
Head of Retail Warehouse and Leisure Investment, Marcus Wood, said: “The first half of the year has seen strong liquidity within the retail warehouse sector. Stock has increased with a significant amount set to enter the market in H2 as a number of funds look to take advantage of market liquidity.”
The occupational market continued to improve, benefitting from the 26th month of consecutive year-on-year growth and the consumer confidence index at its highest level for nearly 15 years.
Jonathan Rumsey, Head of Retail Market Analysis at DTZ, said: “Retail sales as measured by the ONS have seen the longest sustained period of growth since 2008.
“Low inflation, rising employment and real wage growth have led GfK’s consumer confidence index levels to rise to a level not seen since the turn of the century, while vacancy rates remain at their lowest since 2010.”
“Retailers are acting positively by making strategic occupational property direction decisions against a strong macroeconomic position. This positivity has seen the list of retailers acquiring floorspace continue to grow, including the likes of Ikea and House of Fraser.”
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