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Retail About to Turn the Corner, Claims CCRE

LONDON-The poor performance of retail properties of late has led many investors to abandon the sector, but there are signs of an upturn, according to Colliers Conrad Ritblat Erdmans' annual Midsummer Retail Report.

By Graham Parker | Updated on June 22, 2001

LONDON-Retail was the worst-performing property sector in the past 12 months, but there are signs of an upturn on the horizon, according to Colliers Conrad Ritblat Erdmans’ annual Midsummer Retail Report. Average shop rents grew by a paltry 0.4% in the year to May 2001, the worst performance since 1994.

According to the IPD Index, retail produced an annual return of 6.6% in 2000, and CCRE is forecasting that 2001 will be even worse at 5.4%. This poor performance has led investors to abandon the sector. Prime yields are now up to 5.5%, and CCRE partner Mark Wills-Williams expects them to weaken further to 6% by the end of this year. And the premium paid for ‘superprime’ pitches during the late 1990s now no longer exists.

But with like for like retail sales growing at an annualised 9.3% in May, there are signs that retailers are beginning to expand again, and CCRE forecasts that retail will be the best performing property sector in 2002, with a total return of 11.7%.

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