Law firm Olswang reports its property team has been busy buying and selling shopping centres in cities across the north of England and has invested nearly half a billion pounds on behalf of its clients in the last 12 months.
It proves, contrary to popular belief, there is a continuing appetite in the retail property market in the north of England, the company says.
Over the past 14 months, the UK press has painted a depressing picture of retail, and by association, the state of the real estate market across the north, said Olswang. With statistics calculating a 14% vacancy rate in town centres, few saw beyond the gloom to the opportunities available for investors prepared to invest in properties across the north of England, it said.
While many high street retailers like Thomas Cook, Dixons, HMV and Top Shop are closing down stores by the dozens across the UK, discount shops such as Poundland and Home Bargains have managed to slip under the recession radar. Olswang said of the 14 shopping centres it has acquired managed and disposed of for its clients over the past year, approximately 80% of tenants fell within the discount sector category of retail business.
“The key is responsible investment,” said Catherine Maxwell, senior associate in Olswang’s real estate group.
“The recession has had a real impact on purchasers as they look to invest in long-term high yielding opportunities they can continue to develop into fortified, recession proof portfolios.
“The investor clients we’re working with are seeking out alternatives to the traditional investment property model. As such, we work along side our clients steering them through rigorous due diligence to assess the financial health of the retail businesses within the target asset. Investing front end time and financial resources helps to ensure the longevity of our clients’ investments.”
In Liverpool, for example, a recently purchased shopping centre scheme comprising some 130-plus retail businesses could boast only five empty shops units in the middle of one of the most unyielding recessions in modern times, making the centre a truly desirable property asset for investors looking for high yields, said Olswang.
Olswang real estate partner Tim Westhead said: “We’re working with very sophisticated national and international investors who are looking for targeted opportunities. We’ve found by providing them with a 360° approach to managing these assets our clients are able to retain and protect the profitability and market value of these shopping centres.”
“The knock-on effects of responsible investment can be to boost local economies which of course can curry favour with town councils, bolster employment and community engagement and even the residential property market.”