BCSC Showcase: "Don’t Rule Out Secondary, The Picture Is Rosier Than You Think"
Posted by Jaya on 13th Sep 2013
There is a clear trend that secondary shopping centres are now being seen as an income asset - people are not buying on the premise of redevelopment/extension and rental growth, rather buying off a sustainable yield (8-10%), gearing appropriately (50-55%) to over gross cash on cash returns of 11-12% and a net dividend/distribution of 7-8%.
Secondary Shopping Centres offer a unique opportunity now for a number of reasons, but mainly:
- Above figures are compelling
- Rents, due to expiries, are in the process of being completely rebased
- Surviving tenants are robust
- Average lot sizes means that an investment strategy is more scalable than industrial
This trend is wider than the secondary market and this session will hear from a range of investors on the basis on which investment decisions are being made, and what impact this is going to have on flows of capital into the shopping centre market.
For those who missed this presentation at the BCSC Showcase on Wednesday by Mark Robinson (Ellandi), John Duxbury (M&G Real Estate), Allan Lockhart (New River Retail), Phil Tily (IPD), Brian Darling (Lloyds Bank) and Mike Phillips (Property Week), the slides can be downloaded below.
Download the Ellandi & New River Retail Presentation from here.
Download the IPD Presentation from here.