Overseas investment in UK shopping centres has plummeted by a third as a result of the EU referendum, with pre-vote trepidation and Brexit fallout hitting transactions.
Depreciation of sterling has so far failed to deliver the investment windfall many had been hoping for. Year-on-year overseas investment dropped from £725m to £485m in the year to the end of September, according to EGi Retail Research.
Transaction volumes also fell, from a record high of 79 last year to 49 this year, the lowest in five years.This mirrors total investment, which has dropped, with overall spend on UK shopping centres falling from £4.5bn to £3.3bn.
The North West benefitted from the lion’s share of foreign cash, with 84% of the total amount invested by Abu Dhabi Investment Authority for a 50% stake in Liverpool One, and the purchase of Houndshill in Blackpool by New Frontier.
Asian investors marched ahead of the pack, making nearly two-thirds of all purchases and overtaking European and North American investors, which have failed to make a single investment so far this year.
However, European and North American cash made up more than half of all money spent in the last five years.
Helping to make up some of the shortfall are local council investments, which totalled around 10% of all investment. Lack of stock and an unease surrounding big-ticket purchases have made both foreign and domestic investors cautious.
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