38 DATA
SHOPPING CENTRE INVESTMENT TRANSACTIONS UP According to DTZ, the
third quarter of 2011 saw 16 shopping centre transactions totalling £447m, a significant increase on the £339m of deals which took place in the previous quarter. However, the latter half
of the quarter witnessed a number of transactions renegotiated as investor sentiment worsened in response to growing global economic uncertainty. For example The Grange
and Pyramids in Birkenhead were initially marketed for £83.2m, showing a 9 per cent net initial yield. The successful bidder,
Addington Asset Managers and AEW, subsequently withdrew from the deal. The agent says strong
demand and limited supply is supporting prices for prime and dominant secondary assets, but investors remain cautious regarding pricing on secondary and tertiary stock. And evidence of this divergence is now appearing in transactions. DTZ says 15 schemes
were under offer at the end of September, including the Houndshill Centre, Blackpool which was under offer to JV partners Catalyst and Blackstone at a price rumoured to be slightly below the asking price of £90.825m reflecting a 7.0 per cent net initial yield. Other properties that
have come to the market of note during Q3 are Ocean Terminal in Edinburgh, Woolshops shopping centre in Halifax and Marriots Walk in Witney, which is understood to be under offer. After this quiet Q3, DTZ
expects the level of supply to increase in Q4.
CLOTHING AND FOOTWEAR HIT BY MILD WEATHER According to the Retail Sales
Monitor from the British Retail Consortium and KPMG, UK retail sales values were 0.6 per cent lower on a like-for-like basis from October 2010, when sales had risen 0.8 per cent. On a total basis, sales were up 1.5 per cent, against a 2.4 per cent increase in October 2010. Food sales growth slowed and
non-food sales also weakened, with big-ticket items suffering most. Clothing and footwear were hit by the unseasonably mild weather. Homewares remained tough and often deal-driven. Uncertain prospects for
personal finances and the economy continued to make shoppers careful, giving priority to essentials and replacements over discretionary items.
Non-food non-store (internet,
mail-order and phone) sales growth picked up a little in October after falling back in September. Sales were 11.5 per cent up on a year ago, more than the 10.1 per cent in September but less than in August and than the 12.8 per cent in October 2010. British Retail Consortium
director general, Stephen Robertson, said: “Which part of the wave we’re riding varies from month to month but the water is consistently chilly. For a fifth month, total sales growth continues its strangely regular flip- flopping between 2.5 and 1.5 per
Month
cent. But, the year-to-date figure, which smooths out these minor moves, is unchanged from the previous month. This is evidence of the basic weakness of consumer confidence and demand and worrying this close to Christmas. “Underneath the headline figure,
the year-to-date results show almost no growth in non-food sales. Allowing for the VAT rise since last year, that suggests a substantial drop in sales volumes while the food figures indicate very little volume growth. It’s clear customers are cutting back whatever they’re buying. “A lasting lift in consumers’
mood needs a sense that better times will come for jobs, costs and incomes. The Chancellor should use this month’s Autumn Statement to help customers and businesses by offering hope over next year’s planned fuel duty and business rates increases.” And Helen Dickinson, head of
retail at KPMG, said: “With so much uncertainty across European and global markets, UK consumers remain reticent as their personal finances become harder to manage. “The beginning of the month continued with the trend we saw at the end of September: the warm weather helped to boost food sales to the detriment of clothing and other non-food sectors. By the end of the month the gap narrowed,
RETAIL SALES VALUE: Percentage change year-on-year 2009
January February March April May June July
August
September October
November December
January – July average January – December average
Like for like 1.1
-1.8 -1.2 -1.5
-0.8 1.4 1.8 0.1 1.6 3.8 1.8 4.2 0.2
-0.8 Source: BRC-KPMG RSM (food & drink data from IGD)
Total 3.2 0.1
0.6 6.3 0.8 3.2 3.6 2.2 3.7
5.9 4.1
6§ 2.7
1.6 2010
Like for like -0.7 2.2 4.4
-2.3 0.8 1.2 .5
1.0 0.5 0.8 0.7
-0.3% 0.7 1.4
Total 1.2 4.5 6.6
-0.2 3.0 3.4 2.6 2.8 2.2 2.4 2.8
1.5% 2.5 3.3
-0.4 -3.5 5.2
-2.1
-0.6 0.6 0.3
-0.6
food growth slowed and non-food retrieved some of the momentum lost over the previous few weeks. The month overall saw ongoing challenges for big-ticket items and continued high levels of volatility across individual weeks and different sectors.
“But one constant remains: to
whatever extent sales are being made, margins and hence profits are being impacted to stimulate demand as retailers strive to cope with the new reality. “The success of the Christmas
season for retailers hangs in the balance as October’s results do not set a strong foundation.” On the food and drink sectors,
IGD chief executive Joanne Denney- Finch said: “Food and drink sales received a boost at the start of the month, benefiting from the tail-end of the Indian summer, but this wasn’t sustained over the following weeks. “The constant trickle of negative economic news, such as the euro crisis, has not helped to improve consumer sentiment. Shoppers are watching every pound they spend and, with thoughts turning to Christmas, they may be making some sacrifices now in order to end the year on a high. Our latest ShopperTrack research shows six in ten shoppers (61 per cent) intend to spend more or the same as last year on food and drink over the festive period.”
2011
Like for like 2.3
Total 4.2 1.1
-1.9 6.9
-0.3 1.5 2.5 2.5 1.5
0.8%
2.8%
SHOPPING CENTRE November 2011
www.shopping-centre.co.uk
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