Allsop releases its 2019 Commercial Auction Summer Review
- Allsop raised a total of £300 million with an overall success rate of 83% in four commercial auctions from February 2019 to July 2019
- Buyers state that they are seeking larger lots than ever
- The proportion of office investments tripled from 4% to 12.3% as buyers seek higher yields and to diversify risk
- Alternatives such as car parks, motor trade, medical and other miscellaneous sectors, has increased by 15%
Allsop, the leading property consultancy and largest auction house in the UK, has raised a total of £300m with a success rate of 83% at its commercial auctions during the first half of 2019. Although volumes were down 17% compared to the previous year, total value only fell by 7%. 78 lots achieved prices over £1m with an average lot size by value of £716,400, higher than the three previous years.
The figures, which have been released as part of its Commercial Auction Summer Review, reveals that Allsop has generated £202m from investments in the retail sector. The total, which is down from £232m during the same period in 2018, shows that liquidity remains in the sector despite the collapse of a number of high-profile retailers in the first half of 2019 and the continuing use of CVAs.
The report, which analyses the results from four auctions between February and July this year, also reveals a sharp rise in the proportion of office investments offered at auction. The proportion of office investments, compared with the same period during 2018, has tripled, growing from 4% to 12.3% in value. This includes high profile office investments such as HQ of The Lady magazine in Covent Garden, London, which sold under the hammer in February for £12.4m – the largest lot to be sold by Allsop at auction to date. The proportion of retail investments offered at auction slightly decreased from 71% to 68% while alternatives such as car parks, motor trade, medical and other miscellaneous sectors has increased by 15%. Secondary shopping centres, of which seven have been sold by auction in seven months, have seen an uptick in demand. This includes the sale The Postings in Kirkcaldy, which sold for £310,000 in February.
At the high-quality end of the spectrum, yields tightened as buyers seek out quality with best, longest let assets providing yields a little below 4%.
In terms of the proportion of lots by region, national coverage remains clear, with London and the South East showed little change at close to half with 51%, while the largest gains compared with the previous year were in the South West, from 7% to 9%, North East, from 7% to 13% and West Midlands, from 7% to 8%.
The buyers survey showed a shift of buyers investing in their local markets from 45% in 2018 to 50% in 2019 – an increase of 10% as investors sought to rely on their local knowledge to manage risk. Demand was particularly strong for high value lots with 47% of buyers wanting to invest more than £1m, almost doubling since 2016
George Walker, Partner and Auctioneer at Allsop, said: “Although economic and political uncertainty remain, there is still a strong appetite for commercial property assets, particularly in this low interest rate environment which is unlikely to change in the short to medium term.
“However, investors are looking to reduce risk. With High Street woes in mind, they are diversifying their portfolios, with office properties and alternatives in the spotlight, and focusing on high-quality assets with long-term agreements with resilient occupiers.”
Notes to editor
About Allsop auctions
Allsop run the largest property auction departments in Europe through two highly experienced residential and commercial teams and is the UK’s number one auction house by transactions. We offer a wide range of lots covering residential vacant and investment properties, ground rents, land and development opportunities and secondary commercial lots. A minimum of six commercial and seven residential sales are held every year. Visit: http://www.allsop.co.uk/our-services/auctions/selling-at-auction/
Allsop is an independent property consultancy with a market-leading reputation for high quality service and integrity, covering the UK from our offices in the West End, the City, Leeds and Brighton. In addition to our position as the UK’s largest and most successful property auction house, we offer an extensive range of services for residential, commercial and mixed use property.
We have the people, the skills, the experience and the drive to maximise value for our clients in any given market and like to do business in our own distinctive Allsop style – open, friendly and honest. Clients appreciate this, which is why so many stay with us over the long term.
In an unpredictable world, Allsop remains a reassuringly constant source of market knowledge, insight and expertise. Visit: www.allsop.co.uk
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