Retail investment sales activity falls in start of year
Retail transaction volumes were $12.8 billion in the first four months of 2018, according to JLL, reflecting a 46 percent decline in investment into retail assets in the first part of the year. JLL attributed the drop to investor caution and a perception retail returns are not commensurate with current valuations.
“Many investors are either allocating their capital into other property types, to debt versus equity, or taking a temporary pause,” said Naveen Jaggi, president of retail advisory services at JLL, in a statement. “We’re pragmatically optimistic of today’s market and are seeing investors begin to rebuild their confidence in the sector as fundamentals strengthen. Vacancy is stabilized at under 5 percent nationwide, and rents have reached pre-recession levels.”
Although fundamentals are improving, investors were slow to close transactions at the start of 2018, and there is a large amount of capital looking to be deployed into retail.