Commercial Retail Transactions Continuing to Trend Higher

Even though the number of shopping centres transacted in May was well down from the dizzy heights posted in April, they are still up on May last year. The latest estimates from The Data App show the number commercial retail property transactions in the three months to May up over 80% compared to a year earlier, as the Covid-19 induced slump in shopping centre activity has gradually waned.

Unsurprisingly, just as the number of transactions have picked up, so the volume and value of transactions are more than a double their size of a year earlier.

Cap rate are virtually unmoved from a year ago although, beneath the headline numbers, the cap rate among the various commercial retail asset types has changed dramatically.

Around the time the pandemic struck, cap rates for the various types of retail outlet were similar. However, the pandemic brought with it a change in consumer demand patterns. Working from home became more prevalent and, with it, the demand for office furniture and computer hardware picked up sharply. Consequently, the appetitive for large format retail assets picked up sharply, resulting in a decline in yields.

At the other end of the spectrum, with a sharp upturn in on-line shopping, sub-regional shopping centres became less sought after and cap rates for these assets steadily increased. More information of this development can be found at

Large shopping centres will remain vulnerable to on-line shopping penetration as well as the potential closure of smaller retail outlets as Government subsidies and assistance unwinds. This suggests the differential is in cap rates, between neighbourhood centres and the larger shopping centres, is likely to persist for a while yet.

About PAR Group

The Data App (TDA) is a member of the PAR Group, an independent research collective offering a comprehensive range of property research and analytical services. The team is experienced in economics, property research, transactional and corporate strategy; all with extensive industry involvement in both the property and finance sectors. Visit: for more information.