COMMENT: It’s always good to see a commercial auctioneer achieve a 100% success rate in an auction, which Barnett Ross did on Thursday, 14 December, although it sold just 26 properties for a modest £5.8m, writes John Townsend, head of auction advisory service Harold Benjamin.
The previous week, the two main auctioneers in this sector had their final auctions of the year, raising £124.7m from the sale of 168 lots.
This time last year, their total was £163.7m from the sale of 256 properties.
The first off the blocks was Allsop, which raised £83.6m from 111 lots, with a success rate of 75% and an average lot size of around £753,000. It has since improved this to £86.3m with a further three lots selling, which pushes its success rate to 79%.
Two days later, Acuitus raised £41m from the sale of 57 properties, with an average success rate of 78% and an average lot size of around £721,000.
The average lot size at the Barnett Ross sale was £224,000.
Allsop sold 27 lots for more than £1m, with the largest being the £4.1m raised for a former bank in Shoreditch High Street, London E1.
Comprising an imposing part freehold and part leasehold, the property comprised 7,855 sq ft of accommodation, the majority of which was vacant. It was guided at £2.9m.
Acuitus sold 12 lots for more than £1m, with its largest being £4.35m for a prime retail parade in the Promenade, Cheltenham. The investment is let at £302,200 pa, a gross return of 6.94%.
One of its properties was located in one of my favourite towns, Northallerton, Yorkshire. Let to Barclays on a lease until 2022 at a rent of £90,000 pa, it sold for £1.51m, a gross yield of 5.96% from a guide of £1.4m.
Another of its properties that caught my eye was a highly reversionary freehold ground rent investment in Church Street and Parker Street, Liverpool.
Let in its entirety to the Prudential Assurance Company for a term of 99 years from 5 March 1947 at a rent of £4,425 pa, it was sublet to Schuh and Co-Operative Bank at a combined rental of £410,000pa. Guided at £1m, it sold for £ 1.5m.
At the Allsop sale, a bank investment in Ringwood, Hampshire, was also hotly contested. Let to Barclays until 2022 at a rent of £45,000 pa, it sold after some spirited bidding for £790,000, a gross return of 5.69%, from a guide of £600-£650,000.
And two lots later, a freehold trade counter investment let to MKM Building Supplies until 2020 at a rent of £48,000 pa sold for £720,000, a gross yield of 6.66% from a guide of £450,000.
Which all goes to show that quality sells best through the auction room. And there are always opportunities to buy for everyone.
A freehold investment in Fore Street, Wellington, Somerset, was offered at the Lambert Smith auction. Let to William Hill on the ground floor until 2021 at a rent of £11,000pa, there were four flats above, three let on ASTs with one flat vacant. Total income was £25,740 pa and it sold for £313,000, a gross return of 8.22% with a vacant flat extra.
All in all, the commercial auction sector has had another good year, realising a total just shy of £1bn. I’m sure will go into the new year feeling confident of a good start – providing the auctioneers can secure the stock at the right price.
