The UK retail warehouse investment market appears to be on track for another bumper year: total transaction volumes totalled £1.264 billion in the first half of 2015.  In fact, the H1 total was 28 per cent higher than the £981.95 million transacted in the same period last year. This was largely driven by a significant increase in deals over £50 million, with nine completing in the first half of the year compared with five in H1 2014. These deals included New Mersey Shopping Park in Liverpool and Drakehouse Retail Park in Sheffield.

Investor demand for assets up to £50 million also improved, with 62 deals transacting in H1 2015 compared with 55 deals for the same period last year. There are £600 million worth of retail warehouse assets currently under offer and a further £1 billion available, so we expect total transaction volumes for the year to reach £3 billion, which is significantly above the long-term average of £2.5 billion.

Appetite for retail warehouse investment opportunities is being led by strong retailer demand and performance, together with a weighted average unexpired lease term of approximately 11 years. This compares with 6.4 years for offices and 9.3 years for industrial, according to IPD.

Looking ahead, we believe that the market will continue to perform well, led by good rental growth prospects, further improvements in both tenant demand and performance and the completion of the first new retail warehouse developments in this cycle.

Further information

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