Shopping Centres in Demand as Investment Boom Continues

LONDON-The investment boom in the shopping centre sector continued unabated in Q3 2002, with £792 million ($1.25 billion) of shopping malls changing hands, double the previous quarter’s turnover, according to DTZ research. In all 27 UK malls changed hands over the quarter, all standing investments with the exception of Centros Miller’s Fremlin Walk scheme in Maidstone, Kent, which Land Securities forward-purchased for £100 million ($160 million).

Both institutional investors and property companies continue to dominate investor activity in the retail sector, although the institutions have been more active during the third quarter. Banks are still investing heavily within the sector, either by way of straightforward loans or through joint ventures, and as a result, property companies and debt-backed purchasers continue to play a major role in investment activity.

Mark Williams, Head of Retail at DTZ, said that the high level of activity is likely to continue: “There were a significant number of shopping centres marketed during the beginning of the third quarter of 2002,” he said. “Investors have sought to take advantage of the competitive investor environment together with the available weight of money, which is delivering premium prices on shopping centres.