September auction raises £24.4m with 95% success rate

24th September 2020

More than a quarter of the lots which sold at the latest Acuitus September commercial property auction achieved prices of more than £1m.

The live-streamed auction on September 24th raised a total of £24.4m through the sale of 95% of the lots offered.

Acuitus Chairman, Richard Auterac, commented: “We added this extra auction to our 2020 schedule to meet the demands of our clients to realise capital.

“Implementation of their strategies had been largely put on hold in the run up to the 2019 election and during the subsequent Covid crisis. Our pre-summer auctions had revealed growing buying momentum from high net-worth investors who are looking for opportunities to achieve a stable return superior to the returns available on negative gilt yields and volatile equities.

“Property company demand has remained resilient for active management situations especially in the light of the recent changes in the use classes order.

“The results from this sale illustrate those trends and show that buyers were undeterred by the Government’s new Covid-19 guidance which was issued the day before.”

The highest price in the sale was the £2.125m achieved by a freehold retail and residential investment in Golders Green, London. Currently producing £42,500 of annual income plus four newly developed flats on the upper floors, the property sold at a net initial yield of 1.8%.

A freehold commercial and residential Investment in London’s Mill Hill let as a chemists with flats above sold for £1.231m at a yield of 4.6% while a similar asset at 46-50 Coombe Lane in Raynes Park – with current income of £122,700 – sold for £1.775m at a yield of 6.5%.

The auction again demonstrated investor confidence in the long-term prospects for High Street properties – whether they remain in their current use or are ultimately repurposed.

A Paperchase shop in North Street, Chichester let on a new five-year lease sold for £980,000, and a shop and upper parts in Petty Cury, Cambridge sold for £1.1m while a Wetherspoons pub with vacant offices above on St Thomas Street in Weymouth, offered on behalf of Receivers, sold for £1.21m at a yield of 6.25%.

Investment in Scotland was strong with a prominent site in Ayr town centre selling for £1.75m while eight M&Co stores all found buyers.

Richard Auterac commented: “As our property sectors are gradually reshaped by the impact of the pandemic and trends that were already underway prior to Lockdown, there are a growing number of opportunities for experienced investors and asset managers.

“It’s a fluid market with investors moving into and out of the market and the property sectors. One pricing model doesn’t fit all and there has to be an expert and nuanced approach to pricing if a seller is to achieve a successful result. Up to the minute market knowledge is more important today than ever.

“Given the current income and future potential that many of these assets offer, we expect concerted buying to continue through to the year-end. This will present substantial opportunities to sellers who are looking to exit their holdings.”

The next Acuitus auction of 2020 will take place on October 28th.