Allsop achieved a 75% success rate at its benchmark February commercial sale, as 77 of the 107 lots on offer sold.
While the success rate was higher than than the 67% achieved in February 2011, totals this year dropped to £37m – down from £48.5m (rising to £60m post sale) in February 2011.
The lower volume was due to a dominance of lower-priced regional stock and receiverships in the catalogue.
Average prices were £478,000 – 18% down on 2011.
Experienced buyers in the room said that Allsop had done well to reach guides on many lots as growing numbers of harder-to-fund secondary properties, which therefore appeal only to cash buyers, were on offer in the catalogue.
Private investors also admitted to being concerned about the strength of covenant on secondary lots coming through.
Sunit Popat of London-based Suncreek said: “There is a lot reluctance to buy a tenanted or part-vacant property on a short lease because the cost of empty rates can quickly wipe out what looks like a high yield once the tenant is lost. Buyers really need to know the building and the area if they are going to buy.”
However, Allsop said it managed to sell three lots that fall in to this category and had failed to complete at its previous sale for higher prices at this week’s auction.
These included a part-vacant office block in Harlow, Essex, which had been knocked down at £980,000 in December. Guided at £750,000 this week, it sold for £1.2m. Similarly a multi-let office building in Milton Keynes was sold for £1.5m as against a December sale price of £1.3m.
Auctioneer Duncan Moir said: “The prices achieved in December put a flag on expectations and more buyers had got themselves into a position to bid for it this time.”
He added: “It has ceased to be relevant to compare today’s market with last year let alone that of three or four years ago. In many ways it is a return to the auction market of the 1980s. We have to price correctly and then there is plenty of interest and bidding from the private investor.”
Lots that sold well included a Pizza Express in Croydon, which sold for £1.5m – a 5.15% yield – and a Kwik Fit on Walworth Road, SE1, which sold for £1.1m – a 4.7% yield.
CORRECTION – Earlier today EGi reported that volumes at Allsop’s February auction were down by 50% on the previous year. This was incorrect and we apologise for confusion caused.
