The UK shopping centre market is poised to see investment transactions hit a 10-year high in 2026, reports JLL in an exclusive-to-CoStar News review.
According to JLL, the UK shopping centre market is on track to see 23 deals complete totalling £1.49 billion in 2025. It says it has visibility on another 14 deals that are under offer and set to trade at £925 million and nine deals in the market seeking around £200 million in total.
Nick Hart, head of strategic transactions – UK capital markets, said everything is now pointing to 2026 being a very strong year for high quality shopping centre assets. "With the Budget now behind us we are likely to see two, maybe three, more easings of interest rates in 2026. 2026 is poised to be a record year of activity in the sector with volumes likely to surpass those achieved since 2016."
Hart added: "Prime leasing markets have never been this strong, particularly in the top 50 retail destinations, and debt availability so competitive for the best assets."
Hart predicts this will lead to prices sharpening.
"Over the last eight years prime shopping centre rents have dropped circa 40%, prime values circa 60%, online penetration over this period has grown and now plateaued at circa 28-30%, and yields have never been this wide." In the third quarter of 2018 these were 4%, while in the last quarter of 2025, they were 7.5%.
"This together with an increasingly active debt and [commercial-mortgage backed security] market means JLL expects 2026 will bring strong competition up and down the capital stack and as a consequence, we will see yield compression on the best assets in 2026."
JLL says 2025’s key transactions were dominated by Hammerson as a special purchaser acquiring three key joint venture stakes: Canada Pension Plan Investment Board's 50% of Bullring and Grand Central, Aberdeen's 59.2% holding in Brent Cross Shopping Centre and Abu Dhabi Investment Authority's 50% holding in The Oracle in Reading. It points out there were no UK institutional bids on prime or dominant UK shopping centres in 2025, in stark contrast to 2024.
Total figures for 2025 will be down significantly on last year, the adviser says. The number of deals in 2025 is down circa 50% on 2024 but total volumes are down by 26%. This is due to the positive trend in average lot size which increased from £45 million in 2024 to £65 million in 2025, an increase of 44%.
JLL has been tracking shopping centre investment volumes since the first days of the sector in 1995. Peak transaction volumes reached £9.1 billion in 2004, while in 2020 volumes were at a 30-year low of £360 million as the pandemic hit. Average trading volumes between 1995 and 2015 were £3.80 billion with an average transaction value of £56.5 million, while average volume between 2015-2025 was £1.81 billion with an average value of £43.3 million.
JLL writes that this dramatic change was driven by a plethora of factors, most notably Covid and online shopping doubling to nearly 30p of every £1 spent from 1995 to 2025.
Hart says that despite external geopolitical and economic factors transaction volumes in 2025 are set to reach £1.5 billion thanks to a "flurry of larger deals completing in the final quarter".
These include: Braehead in Glasgow at £220 million; The Lexicon, Bracknell at circa £150 million; The Oracle, Reading at circa £105 million and Swindon Designer Outlet. Of the major malls understood to be under offer, JLL highlights Merry Hill to Redical for circa £285 million, Silverburn in Glasgow, which CoStar News revealed Landsec is in talks to buy, and Lion Yard in Cambridge.
In terms of buyer types, while institutions and sovereign wealth funds have been quiet recently when it comes to acquisitions, JLL is extremely positive about activity from opportunity funds, real estate investment trust and private equity.
It says it has 32 active opportunity fund client requirements.
Hart says: "The vast majority of these parties have either bid on, acquired, or have actively considered UK shopping centres in the last 24 months. We expect that the opportunity funds and property companies will be very active in 2026."
He says there is now a "generational buying opportunity for the very best assets".
With the debt markets now active in the retail sector JLL estimates that around 15 million-square-feet-plus of prime and dominant shopping centre assets are expected to come to the market.
It says 60% of these assets have full asset management and development management control which will be "highly desirable to prospective purchasers".
JLL says it has been involved in 15 major shopping centre transactions in 2024-25 accounting for 10.35 million square feet of retail in £1.8 billion transactions. The team comprises Nick Hart, Richard Brown, Jonathan Heptonstall, Georgie Levene, Phoebe Stewart and Zara Jackson.