In what was its largest sale of the year to date, the latest Acuitus commercial property auction achieved a success rate of 80% and the sale of £37.3m of assets as the sector adjusted positively to new market conditions.
Problems across the retail and restaurant sectors earlier this year saw the previous round of auctions experience investor uncertainty and a dip in sale rates, but the Acuitus sale on July 11th demonstrated how quickly buyers and sellers have adapted to the new landscape.
Acuitus auctioneer, Richard Auterac, commented: “In May we talked about how we felt that the retail sector and the property market that underpins it had reached an inflexion point which clearly signalled new market conditions.
“This sale showed how the auction room can adapt to changed market dynamics and align buyer and seller expectations to create transactions.
“This sale was about the core retail assets which fuel the private investment market and it was good to see demand from across the board.”
A portfolio of 10 regional HSBC banks all found buyers at prices ranging from £415,000 to £835,000 while nine sale-and-leaseback properties offered by the retailer M&Co also all sold.
The highest price achieved in the sale was £1.78m for a Lloyds Bank in Clifton, Bristol. Let for 15 years from 2010 at a current rent of £100,500, it sold at a yield of 5.3%.
A KFC drive-thru restaurant next to a large Waitrose store in Wolverhampton was sold for £1.61m Currently producing income of £91,200, it sold at a yield of 5.3%.
Investor desire for properties let to national retailers who have a good trading outlook is illustrated by the sale of an Iceland store in Buxton, Derbyshire. Let until 2030 with a break in 2025 and a current rent of £127,685 sold for £1.7m at a yield of 7.0%.
Richard Auterac comments: “The investment market generally has become more complex to predict and pricing is sensitive. A basic approach to pricing simply doesn’t work anymore. We interact with a wide range of buyers and sellers across the UK on a daily basis and this enables us to give our clients the most up-to-the-moment advice on pricing.
“As yesterday’s sale demonstrated, for the right investments there is still sustained demand from private investors and property companies with asset management expertise.”
The instruction deadline for the next Acuitus auction is September 14th.