The investor that undertook one of the biggest UK shopping centre deals of the past few years said it is laser-focused on the true levels of income produced by a scheme when it is underwriting new deals.

“Possibly the biggest shift we've seen over the last few years is investors like ourselves are so much more focused on cash rather than pricing in a yield movement or an [estimated rental value] shift,” Redical Head of Asset Management Stephen Daniels said at Bisnow’s UK Retail Real Estate Conference, held at 1 Wimpole Street.

“We price what we think very fairly, very rigidly, just based on true income.”

Redical bought the 1.7M SF Merry Hill shopping centre in the West Midlands from bondholders of collapsed REIT Intu earlier this year, and Daniels said the company had analysed in detail footfall and customer spending data to ensure that the retailers in the centre were not overrented. That means there would be room for it to grow the centre’s net operating income.

After more than a decade in the doldrums, retail real estate operational performance has been strong in the past few years, driven by several factors, including higher-than-average levels of consumer saving, NewRiver CEO Allan Lockhart said.

While there will always be churn, the shakeout of underperforming retailers whose business models weren’t fit for the internet age is almost over, he said, and those that remain stay profitable by focusing on margin rather than scale for scale’s sake.

Landsec reported this week that rents at its shopping centres rose 5.5% in 2025, and the centres were 98% occupied, underlining how good, well-managed centres are performing strongly.

Having gorged themselves on beds and sheds for the past few years, investors are taking note of that performance and are ready to start reallocating capital to office and retail, panellists said.

Lockhart cited Realty Income, the U.S. investor that started a buying spree in the UK by investing in supermarkets on long leases, as an example. It paid £150M in November for the 1M SF Lexicon centre in Bracknell, south-east England.

“That narrative is starting to change,” CBRE Investment Management Head of Retail Asset Management Louisa Butters said. “I think as long as your portfolio is balanced, there is definitely a space for retail, absolutely, and offices.”

With the Iran war having increased the cost of capital since February, buyers are sitting on the sidelines right now, Lockhart said.

But when pricing comes down, investors will be ready. REITs and private property companies like Redical are monitoring the sector, and Landsec has said it wants to put more than £500M into shopping centres in the next few years.