Investment into the retail sector in the first quarter of 2014 totalled £2.2 billion, standing above the five year quarterly average, according to new research by BNP Paribas Real Estate, the leading property adviser.
This was largely driven by an increased appetite for risk, with investors shying away from supermarkets and instead opting for shopping centres, which accounted for 59% of total retail investment amounting to more than £1.3 billion.
Nick Robinson of BNP Paribas Real Estate’s research department, comments: “The percentage retail represents within commercial real estate investment as a whole increased in Q1 2014. In the first three months of 2014, retail made up 24% compared to 17% in Q4 2013. Prime yields were stable through Q1, with the exception of prime town centre yields, which sharpened slightly to 4.5%.”
BNP Paribas Real Estate’s head of investment, Simon Williams, added: “Intu were the most voracious investor over the period through their purchases of Westfield Derby, Sprucefield Retail Park and a 50% stake in Merry Hill, spending £864.8 million in the process. Other significant acquisitions for the period included a private UK based investor buying 141-142 New Bond Street for £75 million at a 2.6% yield and Pramerica Real Estate Investors’ purchase of 1 to 8 The Broadway, Ealing, for £37.4 million.”
Boosted by the buoyant housing market, retailers within the homewares and home improvement sectors have benefitted with operators such as Dunelm Mill reporting solid Q1 sales. New entrants to the UK include Australian stationer Smiggle, US clothing retailer Seek No Further and French fashion brand IRO.
BNP Paribas Real Estate has acted for new entrants including seek no further and French brand Delifrance’s new concept.