Development opportunities in London led the way in the latest Acuitus auction, which raised £28m with a success rate of 75%.
Acting on behalf of a major corporate, Dignity, seven development opportunities were sold in suburbs across London, with competitive bidding from investors wanting to develop, let or occupy these assets.
Highlights included a property at 259 Kilburn High Road, NW6 (pictured), which sold for £1.4m. It comprises a ground-floor commercial unit and two vacant flats above. Another property at 141 South Ealing Road, W5, sold for £767,000, well above the guide price.
With strong occupier demand and low intrinsic physical obsolescence, institutional-grade industrial investments continue to attract strong demand. In Southam, Warwickshire, a substantial freehold industrial asset was sold for £2.5m at a yield of 6.74%. The property is currently let to two occupiers for a combined rent of £181,005.
In Torquay, the Torquay and Newton Abbot County Court sold in the room for £1.25m at a yield of 9.34%. It is let to the secretary of state for communities and local government, paying £123,750 per annum, on a lease until October 2030 with no breaks.
Charlie Powter, director at Acuitus, said: “Income secured by the government is highly sought-after as it is the highest-grade security. These buildings are usually a perfect fit for the government departments that occupy them, as is this case with this county court. Although government policy is to take traditionally shorter leases with break clauses, it is rare for them to move out. In this case, the tenant was happy to have the break clause removed. A UK government five-year gilt yield is 3.9%, compared with the yield of 9.34% on this asset.”
A prominent Grade II-listed property on Kew Bridge Road in Brentford – comprising a coffee shop, fitness studio and three-bedroom flat – sold prior on behalf of Network Rail. The pre-auction guide was £1.1m.
Several Scottish assets were offered, including a large heritable Grade B development opportunity in Glasgow, at 197 Pollokshaws Road, which also sold prior to the auction. The pre-sale guide was £1.8m.
The largest lot was Mytchett Place in Camberley, Surrey, a Victorian mansion and grounds being sold for mortgagees in possession. Let on a one-year lease, it sold prior comfortably above its pre-auction guide of £3m-£3.5m.
Acuitus chairman Richard Auterac said: “Quality investments will always attract private equity, but we are seeing a lot more appetite for development situations too.
Acuitus will hold its next auction on 7 November.
Photo © Acuitus, courtesy of JPES Partners
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