• Institutional money has also been flooding the London market, leading to a bounce in prices.
• Image Credit: Gulf News file

London: More than £1 billion (Dh5.61 billion) of shopping centres will change hands in the next few weeks as investment activity in the commercial property sector has accelerated following the sudden influx of money into institutional and retail funds.

In the largest deal, Meyer Bergman, the private equity real estate fund manager, this week agreed to buy a half-share in the Bentall shopping centre in Kingston, Surrey, from Aviva, for about £130 million.

It is also to buy a centre in Ilford for about £70 million, one of more than a dozen deals expected to be exchanged next month.

In total, about £1.1 billion of shopping centre deals will soon be completed, according to Briant Champion Long, the retail property specialist. James Watson, partner for the firm, said that most were being sold to UK funds and property companies.

The price on the Bentall centre reflects a yield of less than 6 per cent, nearing the levels being asked during the boom years.

Rare opportunity

Markus Meijer, chief executive of Meyer Bergman, said it was a rare opportunity to own a prime retail asset in one of the most affluent suburbs of London, and one where there were asset management opportunities.

Institutional money has also been flooding the London market, leading to a bounce in prices.

Julian Stocks, managing director at Jones Lang LaSalle, said yields being achieved on certain West End properties had narrowed to 4.25 per cent, nearing prices at the peak in 2007.

Alex Price, chief executive of Palmer Capital, which is also selling properties where there is no further value to create, said: "Now is a good time to sell as the secondary market could well go down in the next one to three years, given the surplus property held by banks."

• By Daniel Thomas, Financial Times | Published: Gulf News February 26, 201