The value of retail property sold at auction has dropped by 13% in the past year, figures released this week reveal.
This reflects sellers’ growing confidence that “weaker” properties will find a buyer, rather than a longer-term market decline, according to Acuitus, which produces the IPD UK Retail Property Auction Index with analysts MSCI.
The index measures the capital value change in retail properties. In the three months to September 2015, it fell by 3.8% – the second consecutive quarterly dip and a 13.2% drop over 12 months.
Acuitus chairman Richard Auterac said: “The movement of the RPAI this year seems counter-intuitive in the face of improving market conditions.
“However, as the UK economic environment improves and there is a growth in real earnings and strengthening consumer confidence, property investors are taking the opportunity to restructure their portfolios.
“They are releasing into the market assets that would not have found buyers even as recently as a year ago.”
In the third quarter of 2015, the IPD UK Monthly Property Index – which measures the
performance of £6.4bn of retail property – showed a 1.2% rise in value of standard shops [single-unit shops on high streets], which reflected year-on-year growth of 4.6%.
The disparity between these figures and the RPAI is down to the fact that leases signed at the peak of the market are now being repriced to reflect the
current market conditions, according to MSCI senior associate Colm Lauder.
Many of these older leases are for properties that are now effectively obsolescent, which means that values – and income – have been weakened, Lauder said.
An increasing number of these properties are being bought with an alternative use to retail in mind, he added.
The value of retail property sold at auction has dropped by 13% in the past year, figures released this week reveal.
This reflects sellers’ growing confidence that “weaker” properties will find a buyer, rather than a longer-term market decline, according to Acuitus, which produces the IPD UK Retail Property Auction Index with analysts MSCI.
The index measures the capital value change in retail properties. In the three months to September 2015, it fell by 3.8% – the second consecutive quarterly dip and a 13.2% drop over 12 months.
Acuitus chairman Richard Auterac said: “The movement of the RPAI this year seems counter-intuitive in the face of improving market conditions.
“However, as the UK economic environment improves and there is a growth in real earnings and strengthening consumer confidence, property investors are taking the opportunity to restructure their portfolios.
“They are releasing into the market assets that would not have found buyers even as recently as a year ago.”
In the third quarter of 2015, the IPD UK Monthly Property Index – which measures the
performance of £6.4bn of retail property – showed a 1.2% rise in value of standard shops [single-unit shops on high streets], which reflected year-on-year growth of 4.6%.
The disparity between these figures and the RPAI is down to the fact that leases signed at the peak of the market are now being repriced to reflect the
current market conditions, according to MSCI senior associate Colm Lauder.
Many of these older leases are for properties that are now effectively obsolescent, which means that values – and income – have been weakened, Lauder said.
An increasing number of these properties are being bought with an alternative use to retail in mind, he added.
