Private investors out in force at March auction

30th March 2012

Buying was dominated by private investors at the latest Acuitus auction which raised £14.5m at a sale rate of 64%.

Acuitus auctioneer Richard Auterac commented: “This auction painted a very vivid picture of the buying precision that private investors are bringing to the sector. Where lots fitted their criteria there was sustained bidding which saw guide prices substantially exceeded in the energetic and vibrant room”.

A trio of shops in Rickmansworth, Cirencester and Aldeburgh which are all let to Sue Ryder Care on new 10-year leases sold at yields between 5.9 and 6.8% while a 2,203-sq ft listed building in Leighton Buzzard let to Lloyds Bank sold for £780,000 at a yield of 4.7%. The sale of the latter was at a level around 20% above its guide price.

A Kwik-Fit Centre at Staples Corner in London sold for £1.47m at a yield of 5.2% while 15 Grape Street WC2 – a 3,755-sq ft office building let to the Republic of Cuba for its London consulate – was bought for £1.4m at a yield of 5.5%.

The auction demonstrated demand for all sectors across a wide geographical spread with buyers in the market for industrial and office assets as well as retail. The industrial sector in particularly showed strong investor interest as an alternative medium to retail.

The Sycamore Centre in Rotherham – a 20-unit trading estate in Rotherham – sold for £1.125m (11.2% NIY and £44 per sq ft) while other industrial investments in Iver and Wakefield achieved £895,000 (10% NIY and £80 per sq ft) and £722,000 (9.7% NIY and £43 per sq ft) respectively.

Auterac observes: “There is still a struggle in some quarters to reconcile the expectations of sellers and their valuers with what buyers are prepared to pay but where pricing is realistic – without being soft – then investments sell.

“This is constantly demonstrated by the lots offered on behalf of receivers and administrators and their bank clients which sell well because they capture the correct approach to pricing for the assets involved.”

Other notable sales in the March auction included:

  • A drive-thru restaurant in Lichfield let to McDonalds at £71,000pa sold for £1.2m at a yield of 5.5%
  • A 1,107-sq ft shop in Brighton’s “Lanes” shopping district sold for £895,00 at a yield of 5.5%
  • Three retail units totalling 3,177-sq ft in Peterborough let on short leases to tenants including Ladbrokes at a total rent of £58,700pa sold for £680,000 which was £180,000 above the guide price

Acuitus is now taking sale instructions for its next auction which will take place on May 24 at the Millennium Hotel, London W1