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UK institutions doubled their year-on-year investment into supermarket property in 2017, as confidence rose in the performance of the sector, a new report has revealed.

The Colliers International Supermarket Investment Review shows institutional investment rose from £216m in 2016 to £482m last year - an increase of 123%.

It came as a total of £1.42bn of UK supermarket assets were traded in 2017, an 18% year-on-year volume increase.

“Property investors are competing fiercely for assets with long leases and secure income across the sectors,” said Colliers head of retail capital markets James Watson.

“The supermarket sector has always featured long leases but the major operational difficulties that it faced in the past three years made UK institutions - traditionally the dominant buyers in the sector - take a standback. They are now emphatically back in the market.”

However, Watson admitted the supermarket sector still faced major challenges, particularly in the area of online fulfilment.

“Getting shopping that has been ordered online delivered to customers remains a major headache for operators.

“Whilst supporting brand loyalty, it is a loss leader for the supermarkets.

“However, some are now combining the desire to have less sales floorspace with the need for online fulfilment capacity by converting areas of existing stores into pure logistics space.”