Retail recovery now more than just a London story

Shopping centres in the UK provided total returns of 14% in 2014, more than double the performance of 2013.

The annual UK Shopping Centres Investment Report by MSCI and Colliers called 2014 “an exceptional period for the sector” and stated that “the retail recovery was now more than just a London story.”

As well as returns being double that of 2013, investment volumes in 2014 rose to over £6bn, a 43% increase on the previous year’s figures.

James Findlater, head of shopping investment at Colliers, said: “The dramatic resurgence in the UK shopping centre investment market which started in 2013 accelerated in 2014 and brought with it new levels of activity, competition and sharpening yields.”

There are also signs that it is not just London enjoying the retail recovery, with many well placed regional centres reporting good returns and expecting modest rental growth during 2015.

Prime units, offering a unique shopping experience, continue to lead the pack when it comes to progressive values and the report suggests that for owners of secondary centres, now may be a good time to sell and take profits.

The report also addresses the challenges from online retailers, stating that the retail world is still learning how to deal with smaller store portfolios whilst facing the competition from online stores.

Summarsing the findings, Colliers’ James Findlater, said: “For UK shopping centre investment, 2014 was most significant for the news that the retail recovery was more than just a London story.”

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