Allsop has raised £94.6m at its third commercial auction this year with strong investor interest in good quality, long term assets.
The auction room in May remained buoyant with 124 lots sold and a noticeable increase in purchases by overseas buyers. Investors remained relatively undeterred by political uncertainty surrounding the snap General Election, with assets in a good location, along with steady income and a long lease, proving popular.
There was strong demand from London and across the UK, with 31 lots sold over £1m at yields which were largely unchanged since the last sale.
There was some hesitancy from buyers for riskier lots in less desirable towns and shorter leases. The market has adjusted in this sector, particularly for the more northern towns, where rents are yet to stabilise in the face of slackening tenant demand on the High Street.
Lots with good quality tenants were highly sought-after, including lot 98, a freehold town centre bank investment in central Basingstoke. The lot sold for £3.34m, 6% net.
Demand for long-term investments outside of the South East also remained strong with lot 124, a freehold care home with a 23-year lease in Newport, Shropshire with a 7% net selling for £2.65m. Whilst lot 100, an attractive supermarket let to Waitrose until 2025 in Melksham, Wiltshire, sold for £3.25m, 6.75% net.
George Walker, Auctioneer and Partner at Allsop, commented: “Raising over £94m across 124 transactions shows a tremendous depth of investor appetite at a time when there is some political uncertainty in the air. The figures from UK plc remain positive and ahead of expectation, with rising levels of inflation generally predicted to be a temporary phenomenon, giving investors continued confidence to invest in better-let assets with long leases and reliable tenants.
Once the General Election is behind us in early June, we anticipate continued appetite from the cash-rich private investor, eager to enhance returns on their portfolios where the value of cash deposits is eroded on a daily basis in the bank.”
Allsop has now raised £250m this year with an average success rate of 82%.
Further auction highlights include:
- Lot 94, Stoke Newington, London Located in fashionable Church Street in Stoke Newington is this shop, let at £138,200pa, rising to £151,950pa in 2020, guaranteed by Whole Foods Market Inc. until 2030 without a break. Sold for £2.6m
- Lot 93, Sutton Coldfield, West Midlands
Located in the Royal town of Sutton Coldfield, an affluent suburb of Birmingham, the property is located just seven miles from Birmingham. Currently let to Azzurri Restaurants (t/a Ask Italian) with guarantee. Lease expires in 2032 with no breaks and a yield of 5.47%. Sold for £1.29m