The out-of-town investment market saw around £444m of deals in the second quarter – a 146% increase on Q1.

According to Knight Frank, summer 2013 out-of-town retail and leisure research report, Q2 volume also marks a 25% increase in the number of deals transacated on the previous quarter.

Recent transactions include the sale of Coliseum shopping centre in Ellesmere Port for £81m – a 5.25% net initial yield. There is still a significant yield differential between prime and secondary assets, in particular the bulky goods sector where rents are under pressure. Yields for prime open A1 schemes hardened from 5.35% to 5.25% in June, while yields for prime bulky goods parks moved out to 6.5% – and Knight Frank expects the trend to continue.

The report notes that discount retailers are currently undergoing an expansion process and are significantly changing the out-of-town retail landscape. Their increased presence on retail parks has led to some of the best operators enjoying margins of more than 15%.

Knight Frank says that rents paid by some of the more aggressive retailers in recent years suggest that headline rents have fallen steadily. An average rent for The Range, across a sample of 54 stores, is £10.55 per sq ft, while B&M pays just £11.71 per sq ft across a 91-store sample.

The report also outlines the rise in the number of casual dining restaurants in the out-of-town sector. At least four times more food and drink outlets opened on retail parks compared with fast food restaurants over the last year. Operators such as Nando’s, ASK and Pizza Express have recorded strong organic growth and helped extend dwell time. The average rent across 206 restaurants was found £24.36 per sq ft, with an average size of 3,450 sq ft.

Andrew McGregor, head of leisure, Knight Frank, said: “Investors sentiment for out-of-town retail parks, substantially let to discount operators, is patchy at best. However, Knight Frank’s analysis would suggest that many operators have considerable covenants in their own right, and whilst they are driving aggressive tenant packages, they are extremely successful retailers generating high levels of customer footfall.

“Coupled with this, many landlords are now considering A3, food and beverage offers, on their out-of-town retail parks, which is further enhancing footfall and dwell time for shoppers seeking sustenance. A prime example of this is the recent addition of Frankie & Benny’s and Harvester at Birmingham Fort.”