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£2.4 billion of assets transacted in UK retail market representing a 51 % increase on Q2 2013
London, 5th August 2014 – Analysis of European retail investment figures by JLL shows that landmark transactions and widening geographic focus have pushed volumes up 86 per cent from Q2 2013 and that the UK accounted for over 30 per cent of total European transactions.
Across Europe, JLL reports a strong Q2 and first half of the year. Standing at €16.4bn, volumes in the first half of this year are 44 per cent ahead of the first half of 2013, and 35 per cent above the 5 year first half average. The second quarter of 2014 was characterised by landmark transactions in London and Paris, with the largest transaction being the £656 (€805) million purchase of a 30 per cent stake in Bluewater, Kent by Land Securities (plus £40 million (€49 million) for the full asset management rights and 110 acres of surrounding land, valuing the scheme at c.£2.2 bn (€2.7 bn) overall). The Bluewater transaction illustrates the ongoing appeal of large dominant schemes within Europe’s key cites.
Adrian Peachey, Head of Retail Capital Markets UK at JLL, commented: "Investor demand proved strong for Bluewater with around 10 parties showing serious interest. The ultimate reported yield of 4.1 per cent reflects the attractiveness of the asset in the market and the considerable further value associated with the management of the 100 per cent interest. Investors are buying increased levels of certainty when they invest into this kind of product. A combination of strong local economic fundamentals; connectivity; diversity and vitality; identity; and dynamic and proactive management, contribute to Bluewater’s resilience."
Other key deals in Q2 2014 include the purchase of an 80 per cent interest in The Chimes centre in Uxbridge for £218.5 million by Malaysian pension fund KWAP, reflecting an initial yield of just over 6 per cent. JLL also advised Legal & General Property on the recent sale of Lend Lease’s Golden Square shopping centre in Warrington to clients of LaSalle Investment Management for £141.175 million, reflecting a net initial yield of 6.75 per cent.
In the secondary market, UK pension funds have joined the private equity and retail asset managers already active. The demand for secondary assets is highlighted by bidding level; there were eight bids received for Washington Square in Workington, Cumbria, eventually purchased by Europa for just over £30 million, reflecting an initial yield of 7.75 per cent.
Given improved economic sentiment, a continued increase in the weight of capital and over 15 centres due to come to the market before the end of the year, JLL expects to see an increase of 20 per cent in volumes in 2014, from the £9.3bn recorded in 2013.
Director - UK Retail Capital Markets
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