COMMENT Allsop and Acuitus held their second online commercial auctions last month in what the market has now accepted as the new norm, but each took a very different approach.
Allsop was purely online with no sound, whereas Acuitus adopted a live stream auction with Richard Auterac conducting proceedings as if it were a live auction, accepting telephone and internet bids.
Having patiently sat through both, I found the live streaming much more user-friendly, adding not only character but sound and as close as it is possible to replicate ballroom auctions.
The number of lots on offer was significantly less, with Allsop offering 47 of its original 58 lots and Acuitus with just 22 out of an original 36.
The two auction houses realised a combined sales total of £51.5m from the sale of 57 properties out of a total of 69 offered, showing a collective success rate of 83%, which is really quite encouraging in these challenging times.
But how different the picture was to May last year, when there was no virus and no restriction of movement. Between them they realised £99.5m from 159 properties out of 183 offered, an 87% success rate.
Both auction houses have done well to adapt to the current situation and have succeeded in maintaining their auction presence in a very efficient way with a good deal of success.
Allsop sale
On the day, Allsop sold 41 properties for £37.96m, of which £19.5m was realised in the “virtual auction” and £18.46m either from the six that sold prior or from the one sold immediately post-auction in Muswell Hill, N10.
Its biggest sale was lot 19 in Tottenham, N17, which sold prior for £7m, a gross return of 5% with future development potential.
The biggest lot to sell under the virtual hammer was lot 15 in Barking Road, Upton Park, E13. A freehold with two ground-floor shops and four flats above, it was producing £129,620 pa and had a guide of £1.7m-£1.8m. It sold for £2m, a gross return of 6.46%.
Two lots that I rather liked were adjoining retail investments in Park Street, Walsall, offered by Threadneedle Property Unit Trust. Lot 22 was let to Kentucky Fried Chicken until 2040 at £70,000 pa. It was guided at £725,000-plus and sold for £927,500, a gross yield of 7.54%. Lot 25 was let to WHSmith until 2024 at £48,800 pa and was guided at £465,000-plus. It sold for £470,000, a gross yield of 10.38%.
Acuitus sale
Acuitus realised £13.4m from 16 properties with a success rate of 73%. Seven sold prior for a total of £8.9m, while £4.6m came from live-streamed sales.
Two properties sold under the virtual hammer for £1m-plus, the largest of which was a heritable supermarket investment in Fraserburgh, Aberdeenshire (lot 8). Let to Co-operative Food until 2027 at £101,305 pa, it was guided at £950,000-£1.05m and sold for £1.055m, a gross yield of 9.6%.
The second was in Chatteris in Cambridgeshire (lot 3), offered by the Co-operative Group. A freehold retail investment with a car park and let to Booker Retail Partners until 2037 at a rent of £80,000 pa, it was guided at £850,000-plus. It sold, after extensive bidding, for £1.04m, a gross return of 7.67%.
Acuitus largest lot was lot 25, in High Road, East Finchley, which was guided at £4.75m, but was sold prior. This freehold site of a third of an acre has consent for offices and 21 flats.
Greater flexibility
Both sales clearly demonstrated the flexibility now being offered to auctioneers as to which properties to offer as they can now gauge interest far more accurately by the number of pre-registered bidders for a particular lot, who would have had to lodge funds to bid. If no-one has registered, the likelihood is that the property will not sell and the clients can be advised to withdraw the property.
How different the percentage success rates might have been from these two sales in “the real world”, pre-virus and in what were considered normal auction conditions, with bidders not having to pre-register or lodge funds to bid, where most of the properties in the catalogue might have been offered without being withdrawn prior.
In these two most recent sales, Allsop withdrew 11 lots, whereas Acuitus withdrew 14 – more than a third of the original catalogue. In Allsop’s March sale, it withdrew 81 lots from the original 163.
If Allsop had offered all 58 lots in its May sale and sold the 41 that it did, the percentage success rate would have been 71% rather than the 88% achieved.
Likewise, if Acuitus had offered all 36 lots, the 16 properties sold would have shown a 45% success rate.
Very efficient method
However, both sales clearly demonstrated that both auction houses have adapted to the new conditions with a very efficient method of sale, and investors, who would seemingly prefer to bid live, are prepared to bid online if this is the only channel available to them.
The efficiency of online sales is shown by Allsop adding an extra date to its calendar in June and, if successful, there is no reason why more sales cannot be added throughout the year, with sales possibly every month.
It will be interesting to see whether their experience of conducting sales online will persuade auctioneers, after lockdown has passed, to adopt them as their preferred method of sale over live ballroom auctions or whether they will simply add them on as an additional service to clients.
What they have done though is to continue to meet the demand of investors and vendors alike and demonstrated that there is a credible place in the market for online sales.
John Townsend is head of auction advisory service at Harold Benjamin Solicitors
