UK riots should not affect property investment-BPF

LONDON Thu Aug 11, 2011 9:14am EDT

LONDON Aug 11 (Reuters) - Property investors should not overestimate the impact of riots targeting high streets and shopping malls in several key UK cities, or allow them to affect decisions on committing money for developments, a lobby group said.

Late-night riots over the past week, mainly in London, Manchester, Liverpool, and Birmingham, have seen shops torched and shopping centres broken into.

"Whilst it is still early days, we would very much hope that the property industry's ability and appetite for delivering much-needed and sustainable development in UK towns and cities will remain strong," BPF chief executive Liz Peace said.

"The sort of assets that attract large-scale and overseas investment in commercial property are definitely still standing and are largely unaffected," she told Reuters in an email.

Televised coverage of burning buildings and looting has served as yet another negative in what has been a tough year for the UK high street, with dismal vacancy rates, rents and capital values, and a fresh round of retailers shutting up shop already expected.

On Wednesday, industry experts said the riots may cause property investors to think twice about pouring cash into retail assets outside central London, undermining renewed interests in already-struggling secondary locations.

This year, global investors have become increasingly keen on out-of-London UK shopping centres, chasing attractive yields and value-add opportunities. Possible mall buyers include a raft of property companies, funds, and sovereign wealth funds from around the world.

Shopping malls damaged in the riots included Hammerson's Bullring in Birmingham and the Manchester Arndale Centre, co-owned by Prudential and Capital Shopping Centres . CSC and Hammerson were repairing their malls, which had reopened.

So far, British police have arrested more than 1,000 people across England after the surge of disorder struck the country, leaving communities ransacked.

On Thursday, Prime Minister David Cameron announced measures to help businesses affected by the riots, such as a 20 million pounds ($32 million) support fund and a pledge to examine rules stopping shops from using protective shutters.

The British Council of Shopping Centres urged the government on Thursday to provide more support to affected high streets by reducing business rates.

Figures from Local Data Company showed more than 48,000 of the 476,000 outlets it tracks had either directly or indirectly been impacted by the riots, with 28 town centres across England affected by the violence and looting. ($1 = 0.619 British Pounds) (Editing by Andrew Macdonald) (Reporting by Brenda Goh and Tom Bill)

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