Retail real estate investment in the UK has reached almost £4bn so far this year, the highest among all European countries in a regional total of £19bn.
Data from BPCE Solutions Immobilières, presented at an investor sentiment panel at the Mapic conference, highlighted the UK’s dominance in retail investment volumes, driven by activity in shopping centres, steady yields and high prime rents.
Roman Müller, head of investment management retail at Union Investment, said: “Present investment sentiments are focused on winning concepts and well-performing schemes. They expect three to five years of yield progression. Next year we will see more capital coming to the market.”
Müller added: “Investors want to invest in Western Europe, so it is important to focus on operational market and understand shopping centres to increase cash flow.”
Overall, retail investment across Europe declined by 10% year-on-year. However, the UK’s performance highlights a resurgence of confidence in its retail sector.
Mathieu de Mallmann, global head of retail and healthcare at AXA IM Alts, said: “The UK has been challenging but now we see many nice assets trading at nice yields and capex is the key for the future to improve efficiency of assets.”
London’s retail market stands out, driven by high prime rents and stable yields, with tenant demand and investor confidence apparent in urban hubs. Prime rents for high street properties per year are highest in Paris at £2,322 per sq ft per year, followed by London at £1,858 per sq ft and Milan at £929 sq ft.
Beyond the UK, retail investment growth has been concentrated in Southern Europe and Poland. Across Europe, shopping centres have attracted approximately £13.9bn year-to-date, while high streets accounted for around £4.3bn.
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