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Out-of-town shopping centres show steep growth

Britain's out-of-town shopping centres saw their value soar by 6% in the third quarter of this year, marking the second steepest increase since 2000, according to latest figures. CBRE's Prime Rents and Yields Monitor report found that the centres' capital appreciation dwarfed the 3.8% growth in values for in-town shopping centres, echoing growing demand for large, dominant destinations. Rents also grew strongly in out-of-town shopping centres, rising 2.1%, though not enough to keep pace with growing property values. As a result, yields were pushed down to 4.5%, their lowest since 2000, making these sites increasingly attractive for investors seeking to cut their exposure to risk. The overall shopping centre sector saw capital value growth of 4.5% and rental growth of 1.6%, the highest across all prime commercial property sectors, which averaged 2.2% and 1.1% respectively. The popularity of shopping centres seems to have come at the expense of high street shops as property values in the rest of the retail sector have grown by just 2.2%, a figure buoyed by strong capital value growth in central London of 5.5%. Natasha Patel, associate director at CBRE research, said: 'On the whole, we saw fairly modest capital value growth in Q3, but both rents and capital values in out-of-town shopping centres have grown remarkably.'

 

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