Industry

Warehouse investment up one third in H1 2015

Investment in retail warehouse space jumped by almost one third in the first half of 2015, according to commercial real estate company DTZ.

The giant of the commercial property sector published research showing that £1.31bn was invested in retail warehouse transactions during H1 2015, with the largest single transaction of Q2 being the £110m invested by L&G in Birstall Retail Park in Leeds.

Topline findings from DTZ’s research include:

  • Completed transactions in Q2 2015 totalled £635m across 28 transactions, up 33% on Q2 2014 volumes
  • Total H1 2015 exceeded £1.31bn across 57 transactions, 27% up on H1 2014 volumes
  • High transaction volumes expected to continue into the second half of 2015

The second quarter of the year saw a number of large transactions. The five largest had a combined total of £298.4m accounting for 46% of total transaction value.

Marcus Wood, Head of Retail Warehouse & Leisure Investment, said: “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. We believe supermarkets are currently ‘oversold’ with yields stabilising by the end of the year while the household goods and furnishings has seen positive retail sales growth which should indicate rental growth.”

His colleague Jonathan Rumsey, Head of Retail Market Analysis at DTZ, added: “Retail sales as measured by the ONS have seen the longest sustained period of growth since 2008. Low inflation, rising employment and real wage growth have led GfK’s consumer confidence index levels to rise to a level not seen since the turn of the century, while vacancy rates remain at their lowest since 2010.

“Retailers are acting positively by making strategic occupational property direction decisions against a strong macroeconomic position. This positivity has seen the list of retailers acquiring floorspace continue to grow, including the likes of Ikea and House of Fraser.”