The final Acuitus commercial property auction of the year saw the sale of 59 lots for a total of £34.89m. This took the total volume of Acuitus sales in 2018 to just under £240m.
Acuitus auctioneer, Richard Auterac, commented: “This is a remarkable result for our clients, who in the main are institutions, investment funds and asset managers. It has been delivered against a political atmosphere that some pundits say hasn’t been seen since the days of Cavaliers and Roundheads!”.
Despite the continued negative press towards UK High Street retail, it was assets of this type which produced some of the most notable highlights in the Acuitus December sale.
A 1,227 sq ft shop on Stamford High Street which has recently been let on a new 10-year lease to Hotel Chocolat at a current rent of £47,000 sold for £962,000 at a yield of 4.2%. In Northallerton, a Clintons store at 191-192 High Street that has been recently subject to a five-year lease renewal at a rent of £100,000 sold for £1.515m at a yield of 6.2%.
Richard Auterac comments: “There are many examples of investors backing the UK High Street – if the location, the retailer and the lease terms are right.
“Yes, High Streets are under pressure – as indeed is all retailing – but there are many investments which offer solid fundamentals.”
Buyers at the auction also showed an appetite for a diverse range of assets. A McDonald’s drive-thru restaurant in Bradford let until 2047 at a current rent of £64,950 sold for £1.3m at a yield of 4.71% while a Travelodge hotel investment in Barnsley sold for £1.525m at a yield of 4.7%. In Pudsey, a 20,979 sq ft Job Centre producing income of £121,800 sold for £1.7m at a yield of 6.7%.
Auterac commented: “This is a market which requires us to have a meticulous approach and deep knowledge of the investment requirements of a wide range of national and international investors. There may be much that investors cannot influence – particularly in the domain of geo-political turmoil – but they remain confident that astute stock selection and an attention to the inherent security of an asset’s income can generate superior returns.
“Although we had a high volume of telephone and internet bids at this sale, many of the bigger buyers tell us that they currently prefer the transparency and the tangibility of literally ‘being in the room’ where there is direct contact with us and other investors. In a volatile political period the transparency of pricing brings certainty and reassurance for our clients.
“We look forward confidently to 2019 in the strong belief that our results will bring clarity to valuations and demonstrate to investment funds and asset managers that the buying power that we can harness has no equal when it comes to the private investor.”
The first Acuitus auction of 2019 will take place on February 14th at the Radisson Blu Portman Hotel, 22 Portman Square, London W1H 7BG.