Over 200 shopping centres in the UK are in danger of falling into administration unless their owners secure fresh funding, according to new data.
Asset management firm APAM estimates that hundreds of shopping centres worth around £7 billion are in danger of breaching debt covenants.
This number has reportedly increased by 75 per cent since last year, as falling market values and increasing numbers of CVAs butcher the sector.
APAM’s executive director Simon Cooke said this was in part due to lack of reinvestment by private equity owners, with the average shopping centre in the UK having changed hands or been refinanced three-and-a-half years ago.
“What’s happened is that net operating income has fallen and yields have gone out further,” he said, adding that owners “have sat on the income and haven’t been reinvesting”.
It based its estimated by analysing transactions that took place using debt between 2012 and 2015, but are now coming towards the end of their bank financing periods.