Buyers focus on core assets at May auction

23rd May 2014

Investors at the latest Acuitus auction targeted core assets in London and prime regional locations.

The auction raised £20m from the sale of 24 lots as buyers once again demonstrated a clear preference for properties in the capital or investments in affluent locations let to good covenants.

Acuitus auctioneer, Richard Auterac, commented: “In March, our auction raised £54m with 92% of the lots selling, but this was a tougher sale today and vividly illustrates that investors will only buy assets which strictly meet their entire criteria.

“As the average lot price achieved today of more than £800,000 shows, it is the higher value, higher quality assets that are attracting buyers.”

In London, 65 Tooting High Street – a freehold retail and residential investment – sold for £1.405m a yield of 5.16%and 43 Eden Grove N7 – a block of 15 HMO flats – sold for £2.05m; a yield of 4.37%.

Outside of the Capital, office investments proved popular with the part-let 18,059 sq ft Nelson Court in Stafford which currently produces income of £85,000pa selling for £625,000. In Reading, the 9,166 sq ft multi-let Havell House sold for £1.35m which reflected a capital value equating to £150 per sq ft.

The gradual recovery of well-let, well-located regional retail assets was illustrated by the sale of the WH Smith-occupied 110 High Street Marlborough, Wiltshire. Let to WH Smith until 2024 at a current rent of £115,500pax, the investment sold for £2.25m at a yield of 4.85%.

There was also demand for freehold bank investments with 2 High Street in Great Bookham near Leatherhead – which is let to Lloyds Bank until 2022 – selling for £565,000 at a yield of 4.94%.

Richard Auterac reports: “We have now sold approaching £100m of assets in three auctions this year which is about 25% up on the corresponding volume last year, but today’s sale was a further reminder of the very particular requirements of buyers.

“The continued progress of office investments outside of London is encouraging, and clearly a market for good retail assets continues but buyers remain highly selective.”

Other sales at the auction included:

  • 259 Station Road, Harrow: freehold retail and residential investment currently producing £30,847pax sold for £610,000 at a yield of 4.78%
  • 612 Wolseley Road, Plymouth: a 2,527 sq ft freehold bank investment sold for £325,000
  • 129 Newhall Street & 106-110 Edmund Street, Birmingham: a 4,374 sq ft freehold public house and residential investment producing current income of £78,750pa sold for £1,482,500 – a yield of 5%
  • Tesco, 142-146 Trafalgar Road, Greenwich: a 4,014 sq ft virtual freehold convenience store investment let to Tesco Stores until 2022 at a current rent of £74,219pa sold for £1.1m

We are now taking sale instructions for our fourth auction of 2014 which will take place on July 9th at the Millennium Hotel, London W1.