Birmingham leads the way as shopping centre investment boom continues - Cushman & Wakefield

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Birmingham leads the way as shopping centre investment boom continues

The sale of Birmingham’s newly opened Grand Central shopping centre to London-based Hammerson will help the Midlands get off to a flying start in the retail investment market.

According to a research from leading real estate company Cushman & Wakefield, some 65 shopping centre transactions totalling £4.01bn either completed or exchanged in the UK during 2015, of which £876 million was transacted in the fourth quarter of the year.

This trend is set to continue in 2016, as there were a number of deals under offer at the end of 2015 that are likely to conclude in the first quarter of this year, including Grand Central, which has now been sold for £335m.

Others on this list include St Enoch, Glasgow; Bloomfield, Bangor; Marlowes Shopping Centre, Hemel Hempstead; and Kings Walk, Gloucester.

Grand Central is linked to the redeveloped New Street railway station, and has many stores opening in Birmingham for the first time. Its anchor store is a major branch of the John Lewis chain.

Doug Tweedie, associate director in the Cushman & Wakefield’s Birmingham retail team, said:  “2015 proved another strong year in the shopping centre investment market and the Midlands saw a significant amount of activity with a dozen schemes changing hands, with a combined value of £752.99m, or almost a fifth of all transactions by value. 2016 is already off to a strong start with the sale of Grand Central to Hammerson, and the recent launch of Kings Walk in Gloucester and Parkgate in Shirley.

“What is most evident is the broad range of buyers coming to the region, with institutional money accounting for only one of those purchases, with the rest coming from overseas, through niche investment managers.

“Whilst challenges continue in the occupational market, leasing activity continues to improve, with many seeing the tangible benefits of a true multi-channel offer. We are now also seeing e-commerce retailers looking to invest in bricks and mortar stores as pressure from the consumer to offer a full line service mounts.

“Investors with the foresight to continually evaluate their assets will ultimately come out on top. Those who invest in technology, create a bright and inviting environment for consumers, and the right spaces for occupiers will continue to benefit from increased occupier demand.”

Barry O’Donnell, head of shopping centre investment at Cushman & Wakefield, said: “We predicted back in January 2015 that shopping centre investment volumes for 2015 would be lower than 2014 but higher than the ten year average.

“This has proven to be the case. A prediction for 2016 is tougher to call. The first quarter will be strong with some big deals set to close in Glasgow and Birmingham. However, achieving another £4bn plus year will be tough as fewer quality centres become available and some vendors will hold rather than sell if their pricing aspirations are not met.”we predicted back in January 2015 that the volumes for 2015 full year would be lower than 2014 but higher than the 10 year average. This has proven to be the case. Prediction for 2016 is tougher to call. Q1 will be strong with some big deals set to close in Glasgow and Birmingham. However achieving another £4bn plus year will be tough as less quality centres become available and some vendors will hold rather than sell if pricing aspirations not met "we predicted back in January 2015 that the volumes for 2015 full year would be lower than 2014 but higher than the 10 year average. This has proven to be the case. Prediction for 2016 is tougher to call. Q1 will be strong with some big deals set to close in Glasgow and Birmingham. However achieving another £4bn plus year will be tough as less quality centres become available and some vendors will hold rather than sell if pricing aspirations not met "