Shopping centres have taken the centre role in 2020
Between July and September, almost 390 million euro were invested in retail, a number similar to that of the same period last year, according to the latest analysis presented by Knight Frank.
Shopping centres have taken the centre role this year by having attracted close to 700 million euro during the first quarter. Next to them, retail parks and assets with good covenants in the food segment remain attractive and the interest for this type of assets from vulture and expert investors also remains the same.
As explained by Elaine Beachill, head of retail at Knight Frank, most investors’ main focus is in transactions with powerful operators on the entire food segment, who can offer assured returns on the long-term. There is still a great interest in retail parks since these assets have shown their resilience against the pandemic, offering open-air experiences to the consumers, synergies in the delivery chain to the operators and an attractive real estate alternative to the investors, betting on the transformation retail-digital-logistic.
In general, during these three months, the large operations were connected to corporate or operative transactions, such as the purchase of Batipart from Adeo, using the sale & leaseback model, of 15 assets in Spain and Portugal (42 in the whole of Europe). Supermarkets have also stood out with operations like the purchase of 172 Supersol establishments by Carrefour.
In terms of prime yields, retail parks have remained stable at 5.5% during this quarter, whereas high-street retail and shopping centres had a slight increase of 3.75% and 5.25% respectively.
«After seeing the first signs of recovery since the start of the pandemic, with some activities such as food, home, electronics and sports equipment registering good performances, the Spanish retail segment now faces new challenges with the arrival of Covid-19’s second wave and with the closedown of shopping centres and other establishments already taking place in many autonomous communities. Nevertheless, this time the sector is better prepared and shopping centres are safe places after having implemented new sanitary measures. The absolute cooperation between owners and operators will be increasingly more important to act dynamically within this context of uncertainty and to adapt to the current situation. Financial and governmental institutions too will have to play a bigger role to support the sector», pointed out Beachill.