Investor demand for high street shops has continued to improve over the second quarter of 2015, though transactional volumes have been restrained by a lack of new stock coming to the market. However, we expect to see more stock being offered in the second half of the year, including some prime assets, and this should ensure that the full year reaches last year's £4bn of turnover.

With investor demand still heavily biased towards prime stock, any such assets that are brought to the market in the second half of the year will be hotly contested. Our prime high street benchmark yield has been stable at 4.25% since December 2014, but we expect that this will have moved in to 4.0% by the end of this year. An interesting bellwether to watch will be the sale of the John Lewis store in Exeter.

We commented in the last issue that we felt that the current spread between prime and secondary yields looked attractive. This story remains true, and it is clear that some investors are starting to move to capitalise on the potential narrowing of this spread. We expect to see assets that may have failed to sell over the last few years coming back to the market in the next six months with much more investor interest. With the improving economic and tenant demand story the opportunity to buy UK retail at 7%+ is starting to look very attractive.

Generally the high street retail investment sector appears to be experiencing a widespread re-rating of risk, with factors that were seen as risky 18 months ago, now being viewed in the context of their longer term averages. Investors are becoming more relaxed about covenant strength, particularly in the light of the rising number of new retailers entering the market. We are also seeing a more relaxed attitude to voids, with some buyers starting to see them as an opportunity rather than a risk.

There has also been a steady rise in the proportion of transactions that are taking place outside London, with nearly 80% of the deals by volume this year being outside Greater London.

We are also hearing anecdotal evidence that lenders are becoming more relaxed about high street retail, and this should ensure that 2016 is a more active year for the investment market.