After a winter of playing wait and see, investors have made a modest return to the UK retail warehousing sector.

British Land has bought retail parks in Preston, Hampshire and Cambridge for £94M, and sold its interest in another Preston retail park for £30M, as investors spin the wheel on out-of-town shopping.

BL said the deals were “in line with our strategy to actively recycle capital and consolidate our position as the UK’s largest owner and operator of retail parks, strengthening our ability to sign portfolio leasing deals and enhance returns”.

The deal saw the 300K SF Capital Retail and Leisure Park, Preston, acquired for £51M, a net initial yield of 8.43%.

The 90K SF Solartron Retail Park, Farnborough was bought for £35M, a 7.65% yield; while the 200K SF DFS unit in Cambridge was acquired for £7.35M, a 7.14% yield. The store sits immediately next to a B&Q BL acquired last year.

In a separate deal BL took advantage of a potentially rising market to sell a 50% stake in Deepdale Retail Park, Preston to Melford Capital for £30M, a 7.5% yield for BL's share, in line with its strategy of actively recycling capital.

“With retailers increasingly focused on the role of their stores, retail parks have emerged as a preferred format, due to their compatibility with omnichannel retail, their affordability and appeal to online resilient businesses," British Land Head of Strategy and Investment Kelly Cleveland said. "This is driving good occupational demand across the portfolio reflected in our 97% occupancy and growing ERVs.”

The move suggested a bounceback in a retail warehousing sector that experienced an unusually quiet winter.

Investment in retail parks hit a four-year high in 2021 when around £1.9B was invested by funds gambling that the post-pandemic new normal would involve a super-strong online retail scene and a slow return to city centres.

Knight Frank data suggested investment volumes held roughly steady in 2022, despite a sharp decline in transactions as the economic outlook became unstable in Q4 2022. In the final quarter of 2022 investment volumes totalled £459M, down 16.3% on Q3.

International buyers and propcos claimed three-quarters of the market with just three buyers — SEGRO, Realty Income and Melford Capital — scooping 60% between them.

Investors have been tempted by demonstrably better retail sales than town centres or traditional urban shopping malls. Last year M&S stores on retail parks were performing at pre-pandemic levels, while high street shops were trading almost one-third down, Drapers reported.

Interest was also bouyed by hopes that omnichannel retailing will allow in-person sales and click-and-collect to function together — to mutual benefit — at out-of-town sites.

British Land was an early enthusiast in 2021, as was Brookfield, paying £330M for a portfolio of seven UK retail parks in a deal with Hammerson, which exited the sector.

By 2023 the mood has nuanced. The consensus in the marquees and bars of MIPIM, the Cannes property convention that concluded last week, was that repriced assets were now poised for recovery. Despite a cautious winter, retail warehousing is one of a handful of asset classes that has not experienced a rollercoaster ride over the last three years, and stability is now something investors are prepared to buy.