London supermarket investments and commercial ground rents proved popular at the latest Acuitus auction which saw the sale of £13.55m of properties and a success rate of 95% of the properties offered.
The largest lot in the auction – a freehold supermarket investment in West Drayton, London – sold for £1.81m at a yield of 4.62%. The current lease with Tesco Stores generates £88,772 p.a., expiring in September 2031 with no breaks and benefits from an important RPI-linked rent review in September 2026.
Charlie Powter of Acuitus comments: “Properties with strong covenants and established occupiers such as Tesco which are in the supermarket sector, are one of the areas being highly sought after by private investors. This property had the added advantage of a big site and potential residential re-purposing of underutilised space.”
Acting on behalf of a global fund, the KFC drive-thru in Northwich, Cheshire, let on a lease until September 2035 at a current rent of £85,000p.a. sold for £1.235m at a yield of 6.5%. Drive-thru fast food investments with long-term secure income continue to be popular providing they have a good main road presence.
Offered on behalf of a Cambridge University College, the auction also included a portfolio of 14 commercial ground rents all of which sold for prices from £16,000 to £550,000. The results achieved far exceeded the original guide prices.
Jon Skerry of Acuitus comments: “We had 120 registered bidders across this portfolio, many of them seasoned ground rent buyers. The sale of these assets offered occupiers and experienced investors a once-in-a-lifetime opportunity to purchase the freeholds of these valuable sites. We are delighted to have been able to successfully advise and sell these assets on behalf of our valued client.
Assets in the Greater London area continued their long-term form in popularity for investors. A dentist investment in Belsize Park, NW3, was sold for £735,000 at yield of 6.81%.
Richard Auterac of Acuitus comments: “Despite some uncertainty following the budget, these results reflect the continuing momentum within the commercial property auction market. Secure assets with strong covenants continue to attract investors and this is being reinforced by pricing levels which meet their investment criteria. The depth of investor interest for the ground rents and the significantly higher prices achieved than expected may for some investors be due to the tax differential between capital gain and income.”
Instructions are being invited now for the final Acuitus broadcast auction of 2024 which will take place on Thursday December 12th. It will provide online, telephone and proxy bidding.
