02/19/2021 | Press release | Distributed by Public on 02/19/2021 04:36
High street retail, regional pubs and leisure parks all saw a 25 bps rise in prime yields over January, reflecting the pandemic's continued impact on the sectors, according to Savills. With leisure park average prime yields now at 7.5% and West End offices at 3.5% the gap matches that last seen in 2008/09. On that occasion, leisure park yields then swiftly moved in over the following year, falling 200 bps in the space of 12 months to narrow the gap between the highest and lowest sub-sectors once more.
Richard Merryweather, joint head of UK investment at Savills, says: 'The current yield gap reflects the weight of funds for core product versus the extreme impact that the pandemic restrictions and consumer spending changes have had on the leisure and retail sectors with the resulting uncertainties around where rental levels are. As more clarity on this comes through, we would expect the gap to narrow.'
Savills also says that the total UK investment volume for 2020 now stands at £46.9 billion, a slight rise on figures first reported in January as additional transactions which took place late in 2020 have been recorded. With final Q4 2020 volumes now at £16.7 billion, they are now 18% above the combined total for Q2 and Q3 last year.