A major pipeline of sales means the UK shopping centre investment market is characterised by resilience and strategic repositioning, building on a strong 2024 that saw transaction volumes reach £2 billion, the highest level since 2017 and a 54% uplift on the eight-year average, reports Savills.
According to the adviser, the first half of 2025 is down 40% on the first half of 2024, with £483 million across 11 deals in this half, but market fundamentals remain strong.
Key assets to sell were Festival Place in Basingstoke, St Enoch Centre in Glasgow and a major stake in Brent Cross in London.
Savills said investor appetite – particularly for prime and super prime assets – is undiminished, and the debt environment has markedly improved, with better loan-to-value ratios and reduced borrowing costs making leverage more attractive.
Despite geopolitical uncertainty, the market is poised for renewed momentum, Savills adds, with a healthy pipeline presenting significant opportunities for the remainder of the year.
Savills says over £3.5 billion in high-quality shopping centre assets are on the market or expected to come up for sale in the next 12 months, comprising approximately 15 assets, including approximately £1.1 billion in stake sales. Last week, Hammerson's acquisition of a 50% stake in the Bullring centre in Birmingham for £319 million.
Other major sales coming to a head are Manchester Arndale and the Lexicon in Bracknell, as CoStar News is reporting.
However, Savills does warn that with multiple exits occurring simultaneously, there is a risk of oversupply over the next 12 months, potentially leading to some failed processes.
Mark Garmon-Jones, director of retail investment at Savills, said in a statement: “We’re seeing a clear shift in investor behaviour. High-net-worth individuals and institutional buyers are increasingly focused on strategic asset acquisition, often irrespective of broader market dynamics. This marks the emergence of a conviction-led investment era, particularly in the core-plus segment, and reflects renewed interest from US capital despite the geopolitical backdrop.”
Yield performance continues to reflect investor confidence, Savills says. Town centre dominant yields have hardened by 50 basis points year-to-date, while prime yields have also moved in by 50 basis points in the last quarter. Savills points out this is notable given the broader economic backdrop. At the smaller end of the market, sub-£25 million schemes continue to trade steadily, underlining the strength of well-located, mid-sized assets.
Sam Arrowsmith, director of research at Savills, added: “While 2025 hasn’t matched the pace of last year, the market’s underlying strength is undeniable. Supportive debt conditions, sustained investor interest, and a growing pipeline of high-quality assets all point to a market that’s recalibrating rather than retreating. For well-capitalised investors with a strategic lens, the coming months could offer some of the most compelling opportunities we’ve seen in years.”