Q1 2015 has seen the shopping centre investment market pick up where it left off at the end of 2014, with investors' insatiable hunger for shopping centre assets continuing into the new year.

Fourteen deals completed in the three months to the end of March, with a total capital value of £828.9 million being transacted. Although this does not compare to the bumper quarter witnessed at the start of 2014, when 24 schemes were transacted in the first quarter, representing a total capital value of £1,494.4 million, all indications are that 2015 will be another busy year in the shopping centre market.

What sets 2015 to date apart from 2014 is the fact that, of the transactions completed in these respective first quarters, schemes have traded at a lower net initial yield during 2015 than 2014, with the average net initial yield for the first quarter of 2015 standing at 7.19% compared to 7.98% in 2014.

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^{Source: Savills Research}

Aside from a busy first quarter, the continued momentum present in the market is demonstrated by the fact that there is a staggering amount of stock currently in the market with in the region of 31 schemes currently available with asking prices totalling approximately £1,284 million. Indeed, the perception that the market will slow down in the run up to the election appears to be unfounded as Savills are aware of at least 18 centres being prepared for the market in the coming months. In addition, Savills research indicates that there are currently 23 schemes under offer, accounting for an additional £673 million.

As in 2014, large portfolio sales remain prevalent. 2014 saw the high-profile sales of the Swallowtail and Tiger portfolios, among others, whilst 2015 has already seen the 7-scheme Project Charlotte released to the market by LaSalle Investment Management, along with three schemes being sold as a package by Moorfield, and the Principal Trust portfolio (also known as Project Bolt), which contains three shopping centres as part of a 12-scheme mixed use portfolio, also in the market.

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Aside from Telford, which remains the largest single transaction completed in 2015 to date, other notable deals that have completed in Q1 2015 include the sale of a 50% stake in the Bentall Centre, Kingston-upon-Thames, which was sold to NPS and Gingko by Aviva for £185 million, reflecting 4.75% NIY, the £35 million acquisition of the Nicholson's Centre in Maidenhead by Vixcroft and Cheyne Capital, reflecting 5.25% NIY, and £75 million acquisition of St. George's Shopping Centre, Preston by Infrared and Hark from Aviva, reflecting 6.41% NIY.

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^{Sources: Savills Research / IPD}

Having captured c.30% of the market during 2014, Savills has continued to lead the charge in the market during 2015, having transacted almost 50% of deals completed in the first quarter, including the high-profile acquisition of Telford Shopping Centre for £250 million on behalf of Orion. Moreover, of the 23 schemes currently under offer, Savills are advising on 11, with a capital value of £294.8 million.