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Investor Interest in Retail Warehouses Buoyant in 2017

  • Volumes in Q1 2017 up 148% on first quarter of 2016 with 16 assets or portfolios worth more than £600m transacted
  • New investors enter sector increasing competition for deals

UK retail warehouses transaction volumes have rocketed in 2017 as competition for space driven by online shopping, according to Cushman & Wakefield.

In the first quarter of this year, 16 transactions completed on assets or portfolios at a combined total of £605.3 million – a rise of 148% on the same period in 2016. The sale of the Project Keirin portfolio by Tristan Capital Partners for £245m was the biggest deal representing nearly 40% or the quarterly total. 

Currently (1 June), £259m of assets are currently under offer with £637.8m being marketed.  

UK Retail Warehouse Investment Market –
Top 5 Investment Transactions Q1 2017

Town Vendor Purchaser Price (£M) Yield (%)
Project Keirin Portfolio Brockton Capital Tristan Capital Partners 245.0 7.65
Abbey Wood Retail Park Bristol Hermes Real Estate IM Invesco 52.9 5.73
Dakota Portfolio Portfolio Travis Perkins Investra Capital 37.8 6.90
Christchurch Retail Park Christchurch LondonMetric Orchard Street Investment 34.5 5.65
Reading Retail Park Reading CBRE Global Investors Columbia Threadneedle Investments 31.4 6.79

Patrick Knapman, Head of UK Retail Capital Markets at Cushman & Wakefield, said: “Volumes to date in 2017 reflect the confidence and impetus in the market. Consumer confidence remains relatively robust which is filtering through into positive investor appetite across the sector. 

“We are witnessing new buyers appearing alongside local authorities and the traditional institutional investor base, which is putting downward pressure on yields across the board for better quality assets. We expect the remainder of the year to be firm from an investment perspective as the sector continues to compare favourably to alternative sub-sectors.”

Quarterly Retail Warehouse Transactions (£m)