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* Riots may curb investors move away from central London
* London's property safe haven image may be damaged
By Brenda Goh and Thomas Bill
LONDON, Aug 10 Property investors will think
twice about pouring money into UK retail assets outside of
central London after rioters damaged shops and malls around the
country, undermining renewed interest in already-struggling
Overnight riots, mainly hitting Manchester, Liverpool, and
Birmingham, saw shops torched and shopping centres broken into,
mimicking scenes seen in London districts, such as Clapham and
Hackney, over the past three nights.
"The riots were more bad news for a (retail) sector already
struggling," said Harm Meijer, a property analyst at JPMorgan.
"It is not a huge disaster at this stage but you could expect a
small impact on estimated rental values," he told Reuters.
This year, global investors have become increasingly
interested in 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.
International investors "will probably be more wary of
looking at some of the (London) suburbs," said Richard Lewis,
property director of developer Town Centre Securities .
Televised coverage of burning buildings and looting will
serve 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
Shopping malls damaged 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
Meijer said the riots could serve to undermine London's
image with global investors as a safe haven, which was behind
the fast run-up in prime central London prices.
"On top you get these messages sent to the outside world,
where it is the lead news item in many countries. It's bad
timing," he said, noting the share market was also down.
Philip Selway, head of the global property wealth team at
broker Knight Frank said security was one of the top priorities
for overseas investors in London.
"The stock market worries us more at the moment but if the
rioting became a regular occurrence or the army was put on the
streets, for example, that would be a concern," he said.
Jonathan O'Regan, senior surveyor, UK Investment at broker
Savills , downplayed the impact. "For our investors, it's
all about the long-term view, so I don't think it's going to
have an effect. It will pass as quickly as it came."
Jeff Adams, chief executive of London-based developer United
House, which has projects under construction in Clapham and
Hackney, two of the riot flashpoints in London, said: "Police
asked us to close down our sites early to make sure there were
no bricks lying around.
"Other than that I sense it is business as usual so far from
our sales operation," he said.
($1 = 0.617 British Pounds)
(Reporting by Brenda Goh)