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British shopping centre investments have reached their highest level since 2016, with transactions totalling £2.07 billion last year, signalling a remarkable revival in retail property confidence. The surge reflects growing optimism among institutional investors, real estate investment trusts, and sovereign wealth funds, which collectively accounted for 70% of market activity.
Property group CBRE’s head of retail capital markets, George Pelling, attributes this resurgence to strengthening fundamentals in the leasing market. The sector has witnessed stabilising net operating incomes, declining vacancy rates, and heightened tenant demand, creating an attractive environment for long-term investors.
The market landscape has evolved significantly from recent years when opportunistic investors dominated transactions. Today’s investors are increasingly focused on long-term holdings, demonstrating renewed faith in the sector’s sustained recovery. While shopping centre values have declined more than 60% since their 2016 peak, according to MSCI, the combination of attractive pricing and improving consumer sentiment has sparked renewed interest.
Premium retail destinations are leading the recovery. Liverpool One has secured prominent retailers including Marks & Spencer, Sephora, Uniqlo, and Zara. The Trafford Centre in Manchester reported 30 new lettings last year, with 47% being new entrants and 33% representing expansions. The centre now operates at near-full occupancy with a waiting list of global brands.
Major property players are strategically positioning themselves in the market. Landsec, one of Britain’s largest commercial property companies, has allocated £600 million for asset acquisition, focusing exclusively on top-tier locations. The company projects rental income growth of 4%, up from earlier estimates of 2.8%. Mike Ashley’s Frasers Group has also demonstrated confidence through strategic acquisitions, including Frenchgate in Doncaster, The Mall in Luton, and Overgate in Dundee.
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