July sale shows auctions on the up

12th July 2013

The Acuitus July commercial property auction raised £33.37m in the room at a sale rate of 73%.

Auctioneer Richard Auterac commented: “Following the success of our sale in May this was another strong and progressive auction with more properties on offer, more buyers in the room and more assets sold.

“The sector continues to strengthen and there is now a solid platform of supply and demand to work from heading into the autumn auctions. Sellers and buyers are recognising that the time is right to realise their respective aims.”

Of the 42 lots that sold, 11 achieved prices of more than £1m and the average sale price was just below £800,000.

The highest price achieved in the room was £3.65m for the Waterdale Shopping Centre in Doncaster which exceeded its guide price by over 80%. Auterac observed: “This is a fascinating example of a complex property which occupies an important town centre location and badly needs regeneration but has to change hands in order for it to move to the next stage of its evolution. The intensity and care of the Acuitus marketing process connected with the growing pool of sophisticated private equity which is looking for fresh opportunities albeit the eventual buyer was a major regeneration company”.

Another substantial retail investment in Lowestoft which had been guided at £4.2m achieved a sale just prior to the auction started after four weeks of detailed marketing and negotiation.

Elsewhere in the sale, a tyre depot investment in London’s Kingsbury was offered with a guide price of £1.35m and sold for £1.63m to reflect a yield of 4.4%. The 4,246-sq ft property is let to Kwik-Fit  until 2033 and produces income of £76,295pax with minimum rental uplifts.

Ground rent investments (GRIs) continue to remain popular with investors looking to lock into secure income streams. A pair of geared GRIs on Southampton’s High Street respectively sold for £700,000 and £850,000 at yields of 4.5% and 5.5%. 

All the receivership properties offered in the sale found buyers and industrial properties were also popular with all but one of the 12 industrial lots finding buyers.

Notable retail properties that sold in the auction included a 1,259-sq ft William Hill in London’s Camden Town which achieved £620,000 at a yield of 5.3%.

However, Auterac believes that there is possibly now too much negative sentiment towards the retail sector as a whole. He comments: “The problems on the High Street have been well-documented and are very real, but investors must take care not to blind themselves to what are real opportunities and succumb to irrational despair”.

Other sales at the auction included:

  • Maidstone, Cornwallis House and Idenden House: two substantial multi-let town centre office and retail investments currently producing total income £212,728pax sold for £1.4m
  • 7 Bell Yard, London WC2: freehold office/dental surgery property offered with majority vacant possession and redevelopment potential (subject to consents) sold for £830,000
  • Sheffield, The Old Monk, Norfolk Street: freehold public house and office investment let until 2027 (with a guarantee from The Restaurant Group) at a current rent £148,500pax sold for £1.7m

Acuitus has sold more than £110m of assets at auction this year and is already taking sale instructions for its fifth sale of the year which will take place on October 17th with marketing commencing in early September.