Tuesday 19 February 2019 1:07 pm | Updated: Monday 03 June 2019 12:43 am

Slowdown in retail investment as Brexit uncertainty puts sellers on hold

Investment in retail property tumbled by several billion pounds last year, as owners of high street stores, retail parks and shopping centres showed a reluctance to sell at discount prices despite uncertainty over Brexit and a swathe of industry-wide pressures.

A gap in price expectations between buyers and sellers of retail property is causing a slowdown in trading in the sector, with new figures showing that investment fell 23 per cent to £7.5bn last year.

Brexit volatility has largely driven the drop, according to a new report published today by Cushman and Wakefield, with sellers sitting tight on their real estate, rather than selling at a cut price, in the run-up to Britain’s departure of the EU.

"Uncertainty over our exit from the EU is clearly having an impact," Cushman’s head of data analytics Nigel Almond told City A.M.

"There is still an underlying demand for assets, but investors are reluctant to bring those assets to the market, so there is a lack of product available."

He added: "Investors are also just more cautious towards retail simply because of the changing dynamics, such as the growth in e-commerce."

Investment in shopping centres has been particularly hit in the last year, with deals excluding entity sales almost halving over the 12 month period to £1bn.

Despite the fall in investment, which has hit not just retail assets but other commercial types such as logistics, volumes across the industry are still trading above the long-term trend.

Some £55bn of commercial assets were traded in 2018, remaining above the long-term average of £42bn.