Funds dominate UK retail warehouse investment

Retail warehouseA sustained period of UK retail sales has also seen higher investment in retail warehouses, with fund managers like Schroders and Aberdeen Investment Management acting as major players.

Real estate investment funds led both sales and acquisitions of retail warehouses in the second quarter (Q2) of 2015 as transactions jumped 33% over the same period last year, according to real estate services provider DTZ.

Players including Schroders, Legal & General, Standard Life and M&G represented 79% of purchases, while Aviva, Aberdeen and Threadneedle accounted for 61% of sales.

Aviva, BL and Hermes made £110 million (€155 million) selling Birstall Retail Park in Leeds to L&G; Aviva sold Gateway Retail Park in Beckton to Standard Life for £47.75 million; and Aberdeen sold Newcastle Shopping Park to M&G for £46.25 million.

Overall, completed UK retail warehouse investment transactions reached £635 million across 28 transactions in Q2, bringing the half-yearly total to £1.31 billion.

As well as the 33% transaction increase quarter-on-quarter, volumes for the first half (H1) of 2015 were up 27%.

Marcus Wood, head of retail warehouse & leisure investment at DTZ, says: “The first half of the year has seen strong liquidity within the retail warehouse sector. Stock has increased with a significant amount set to enter the market in H2 as a number of funds look to take advantage of market liquidity.”

Jonathan Rumsey, head of retail market analysis at DTZ, adds that retail sales as measured by the Office of National Statistics have seen the longest sustained period of growth since 2008, with low inflation, rising employment and real wage growth helping to improve consumer confidence and vacancy rates remaining at their lowest since 2010.

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