Retail warehousing more attractive to investors
The prospect of improving yields is attracting investors back into the prime retail warehousing sector, according to Savills.
Yields on open A1 retail warehouses currently stand at 6 per cent, having risen from 5 per cent a year ago and 175 basis points since 2015. However, increasing demand signalled by a series of recent deals in Bath, Basingstoke and Brighton indicate that yields on high quality stock may move inwards in the future, Savills says in its latest Market in Minutes report.
James Gulliford, joint head of UK investment at Savills, said: “We believe retail warehousing is the segment of the UK retail sector most defensive against the structural change of omni-channel retailing, largely being home to retailers selling products that customers want to inspect before buying, and are therefore unlikely to see the same issues emerge as high street retail.”