LONDON-Sales of UK shopping centers are set to reach record levels this year, despite growing complaints from retailers about rising rents. New research by Cushman & Wakefield Healey & Baker reveals that shopping centers changed hands in the first half of 2005 to the tune of euro 4.03 billion ($4.99 billion). This compares with euro billion ($4.85 billion) paid in the first half of last year.

The firm also predicted that the strong start means sales could beat the euro 9.73 billion ($11.72 billion) of deals in 2004, forging a new record. "It's full steam ahead for the market," says David Erwin, head of retail investment at CWHB. "The volume of transactions mirrors last year's record figures and a significant weight of money is still allocated for the sector."

He adds that pension funds, property companies, private equity buyers and debt-backed private investors were continuing to buy into the sector, despite concerns over the downturn in consumer spending.

Many investors had raised funds for shopping-center investments this year and were committed to proceeding with deals, despite a slump in consumer sales and concerns of retailers about rising rents and property-tax bills. CWHB believes that shopping centers continued to look like a good value for investors, with prime assets generating rental returns of over 5%.

The report further says that deals worth euro 3.08 billion ($3.71 billion) were completed in the first quarter of this year and euro 1.06 billion ($1.28 billion) of shopping centers sold in the second quarter. Roughly euro 2.4 billion ($2.88 billion) of shopping assets are "under offer." Sales expected to complete in the third quarter include a stake in the Whitgift center in Croydon and the Headrow center in Leeds.