The April Acuitus commercial property auction raised £28m from the sale of 79% of the lots offered as buyers looked beyond the political deadlock surrounding the UK’s exit from the EU.
Auctioneer, Richard Auterac, commented: “Investors are drawn to commercial property predominantly for the sustained strength of its income return, and what we saw today was confidence in the sector to go on delivering that regardless of the short-term political situation.
“The demand for the largest lots in the sale – 40% of the assets sold achieved more than £1m – was reflected in the keenness of the yields achieved, and there was appetite for every asset type and every geographic region. ”
The restaurant and leisure sector continues to be the object of sustained investor demand. A restaurant in Newbury let to Côte Restaurants until 2034 at a current rent of £92,500 sold for £1.52m at a yield of 5.62%. A 2,564 sq ft KFC drive-thru on Hernston Retail Park in Bridgend which currently produces annual income of £66,300 and is let for another five years sold for £1.01m at a yield 6.21% representing a capital value of £280 per sq ft.
In the office sector, 60 Abbeygate Street in Bury St Edmunds – a 4,632 sq ft building with parking let until 2025 at a current rent of £80,000 – sold for £1.3m at a yield of 5.81%.
Industrial assets also continue to be the focus for many investors. With a lease expiring next year, a 10,042 sq ft unit at Willowbridge Way in Castleford producing current annual income of £44,000 sold for £780,000 at a yield of 5.35%.
The highest price achieved in the room was for a 23,000 sq ft retail unit on Park Road, Liverpool which sold for £2.95m at a yield of 5.75% – after attracting 97 bids. The current tenant is B&M Retail which is paying rent of £180,500 on a lease which expires at the end of this year.
The Imperial War Museum film archive facility in Cambridgeshire was the subject of huge interest ahead of the sale from a wide range of high net-worth investors, and comprises 11 storage units on a 12-acre site. It is let to The Trustees of The Imperial War Museum until November 2060 with annual breaks from next year at a current annual rent of £37,696. Guided at £250,000, the lot eventually sold for £630,000 at a yield of 5.69%.
Richard Auterac commented: “There were many positives to take from this sale for the market as a whole not just the auctions sector.
“The level of demand for a broad range of assets; the diversity of investors in the market; and the strength of prices paid today indicate that – at the heart of the UK commercial property market – there is still substantial momentum.”
The next Acuitus auction will take place on May 23rd at the The Montcalm Hotel, 2 Wallenberg Place, Marble Arch, London W1H 2TN.