Mall investments are on the rise

Institutions are showing a renewed appetite for centre investment, because buoyant returns are being delivered.

Nearly 50 investment deals, worth£2.46 billion, were completed during the first half of the year, according to property agent Nelson Bakewell.

Only 23 transactions worth£1.5 billion were completed during the same period last year.

Property firms took advantage of the steep rise in the value of centres over the past three years to offload£780 million worth of schemes. Institutional investors were the largest purchasers, pouring an additional£1 billion into the market. Last year, shopping centres chalked up returns of 11.4 per cent, ahead of most other sectors.

Shopping centres changed hands during the first six months of the year at an average yield of 6 per cent. Many even keener transactions took place, including Birmingham's Pavilion Central, which sold for£98 million, reflecting a net initial yield of 5.4 per cent.

ING's£390 million purchase of seven Catalyst-owned malls represented the largest transaction during the first half of the year. Scottish Widows'£212 million acquisition of the Kingfisher Centre at Redditch in Worcestershire, represented the highest price paid for a single asset.

Other transactions included Leicester's Haymarket centre, which sold for£78 million, after changing hands for£60 million last year.