UK retail warehouse investment deals reached £884m during the first half of 2013 – a 153% increase on the same period last year.
According to DTZ’s investment market update, 28 deals were agreed in H1 2012 compared with £349m in 25 deals in H1 2012.
Some £689.5m was transacted in 17 deals during Q2 marking a 233% increase on Q2 2012 – and the greatest quarterly investment volume since Q3 2010.
Yields remain unchanged in Q2 with the exception of supermarkets, which tightened 15 basis points to 4.4%.
Funds were the dominant buyers in the retail warehouse sector in Q2 but private equity increased its market share.
DTZ said that retailer failure remains a key concern for landlords, although it does not anticipate a complete failure by any of the top 20 occupiers in the out-of-town market.
DTZ forecasts prime yields to tighten in the modern format fashion park, hybrid park and to a limited degree, supermarket markets over the short to medium term.
It also believes that stock introduced to the market will remain limited but the grey market will continue to flourish.
Marcus Wood, head of retail warehouse and leisure investment at DTZ, said: “The big bounce in Q2 transaction volumes brings retail warehouse investment turnover back up to market norms, at £884m for H1 after the Q1 low volumes. We forecast this liquidity burst to continue and this could make 2013 a record year for post recession turnover volumes.
“The two big changes in market dynamics is the re-emergence of developers as vendors. DTZ advised Aberdeen on the funding and acquisition of LXB’s sales in the London borough of Greenwich and this illustrates the trend of investors looking to the new wave of development as a way to secure prime stock to upgrade their portfolios.
“The second trend is the massive increase in private equity investment in the sector. We forecast both these trends are set to continue.”