Acuitus sold £37.3m of commercial property at auction yesterday in its largest sale of the year to date and notched up an 80% success rate.
The result suggests buyers and sellers are adapting to the new market conditions after a tough sale in the previous auction round in May, when Acuitus sold £32m of stock and recorded a 64% success rate as worsening conditions on the high street dented investor confidence.
Acuitus auctioneer Richard Auterac said: “In May we talked about how we felt that the retail sector and the property market that underpins it had reached an inflection point that clearly signalled new market conditions.
“This sale showed how the auction room can adapt to changed market dynamics and align buyer and seller expectations to create transactions.
“This sale was about the core retail assets which fuel the private investment market and it was good to see demand from across the board.”
Nine sale-and-leaseback properties offered by the retailer M&Co all sold.
A KFC drive-thru restaurant next to a large Waitrose store in Wolverhampton was sold for £1.61m. Currently generating rent of £91,200 pa, it sold at a yield of 5.3%.
Investor appetite for properties let to national retailers with a good trading outlook was illustrated by the sale of an Iceland store in Buxton, Derbyshire. Let until 2030 with a break in 2025 and commanding a current rent of £127,685, it sold for £1.7m, a yield of 7%.
Banks continued to prove popular: a portfolio of 10 regional HSBC banks all found buyers at prices ranging from £415,000 to £835,000. The highest price achieved in the sale was £1.78m for a Lloyds Bank in Clifton, Bristol. Let for 15 years from 2010 at a current rent of £100,500 pa, it sold at a yield of 5.3%.
Auterac said: “The investment market generally has become more complex to predict and pricing is sensitive. A basic approach to pricing simply doesn’t work anymore.
“As yesterday’s sale demonstrated, for the right investments there is still sustained demand from private investors and property companies with asset management expertise.”
To send feedback, e-mail julia.cahill@egi.co.uk or tweet @egjuliac or @estatesgazette
