Shopping centers have been one of the highest-yielding investment categories in Europe over the past five years, speakers told attendees of the 28th annual ICSC European Conference at the Intercontinental Hotel, Budapest, Hungary.
'One hundred dollars invested in 1997 would look much better today in shopping centers than just about any other investment vehicle,' said Andy Watson, head of investment and valuation at the Paris-based Retail Consulting Group. In France, for example, retail real estate yielded 16.8 percent annually from 1999 to 2001, the most recent figures available, compared with 3.2 percent for bonds and 7.4 percent for stocks.
Returns in the Czech Republic, Hungary and Poland have been about 10 percent, stronger than those of more mature markets such as the United Kingdom, which averaged about 6 percent over the same period.
Retail Consulting President Christopher Wicker pointed out that though total shopping center transactions in Europe have tripled since 1997 to an average Ã¢âÂ¬3 billion ($3.2 billion) yearly, that number is still relatively small. 'Three good days on the Paris stock market would outstrip that shopping center trading volume,' he added.
The United Kingdom figures prominently in EuropeÃ¢â¬â¢s shopping center investment picture, accounting for about half the total Ã¢âÂ¬30 billion invested in the sector over the past few years.
Cross-border investment is growing for all types of property investment, the speakers said, with France, Italy and Spain receiving about 60 percent of all funds. The Netherlands and the United States are leading sources of this capital.
The years since 1997 have been golden ones for shopping center investors, and the speakers said they believe that returns will remain strong for the foreseeable future.