It would be a stretch to say that things are looking rosy in the retail park sector. But there is a lot of interesting activity in the big-box retail market at the moment.

Hammerson has appointed investment bank Morgan Stanley to test the appetite in the market for a sale of its entire retail parks portfolio, according to Estates Gazette. It said a price of £400M was proposed. The portfolio comprises 10 assets across the UK.

The sale comes as retail parks eclipse shopping centres as the area of retail drawing the most interest from investors, albeit that does make it the best of a bad bunch. Just shy of £450M of retail parks traded in the third quarter of the year, according to Knight Frank, more than triple the £130M of shopping centres that sold.

Other recent deals in the sector include Tritax exchanging contracts to buy a £190M trio of retail parks from Aberdeen Standard Life in November, and Intu selling the Sprucefield Retail Park in Northern Ireland to NewRiver Retail for £40M the same month.

The future looks brighter for retail parks than shopping centres when it comes to rents and values in the next few years, but not by much: Values are expected to fall by 7.6% in 2020 following a 12.7% fall in 2019, according to the Investment Property Forum; and rents are expected to fall by 3.4% after a 4.3% decline in 2019.

But retail parks are seen as having the potential to be converted to other uses much more easily than shopping centres. A recent analysis by the Local Data Co. identified 11 retail parks with the potential to be converted to logistics schemes, and investors including Tritax, M7 and Meyer Bergman have been buying properties with this strategy in mind.

Hammerson is selling assets to repay debt and narrow its strategy to focus on shopping centres and outlet malls. Earlier this year it sold the Abbotsinch Retail Park in Paisley to AshbyCapital for £67M and St Oswald’s Retail Park in Gloucester to the local council for £54M. The yields for the centres were 7.8% and 8.5%, respectively, and this is where cap rates in the sector seem to be settling.