Knight Frank has forecast that UK shopping centre investment will reach pre-recession transaction levels by the end of the year.
The bullish prediction by the property services firm follows a strong Q3 when £1.17bn of shopping centres transacted.
This was a 16.5% hike on the previous quarter and the second highest quarterly figure since 2011.
Over the first three quarters of 2014 combined, transactional volumes totalled £3.90bn, 32.2% up on the equivalent period in 2013, according to KF.
The agent’s research showed that, given the current stock under offer and the amount of shopping centres being lined up for sale, transaction volumes could significantly exceed 2013’s level and match pre-recession transaction levels.
It estimates that the out-turn could be around £6bn, the highest level since 2006.
Looking at third-quarter activity, KF said the largest single transaction was Gingko Tree and Axa’s £267m acquisition of Cabot Circus in Bristol reflecting a blended net initial yield of 6.30% for the 50% interest.
According to KF, 10 shopping centres are currently under offer, with a combined quoted sales value of circa £768m.
There are 27 shopping centres being openly marketed, with a combined value of approximately £1.08bn.
For the most part the availability has been dominated by the continued sale of large centres and portfolio sales.
These include the Tiger portfolio, which comprises seven schemes, The Centre in Livingston for circa £200m, 50% of the Bentall Centre in Kingston for circa £180m and the Praxis portfolio, which also consists of seven schemes.
Bruce Nutman, partner and head of retail investment, said, “Capital flows into the UK shopping centre investment market remain very strong.
“These latest statistics indicate that even large lot sizes do not sway the demand as is evidenced by successful sales of schemes in Sunderland and East Kilbride.
“The current trend to sell via portfolios is growing whether direct real estate or NPL portfolios.
“Project Leopard and Swallowtail are good examples with more to follow, offering varying quality of centres but a choice of yield and UK geographical spread. We anticipate that stock levels will remain positive through this year and into 2015.”
