Despite the unprecedented circumstances surrounding the spread of COVID-19 and resulting government restrictions, the commercial auction team raised more than £27m at its rescheduled March auction. Under unique circumstances and challenging market conditions, we achieved a success rate of 70% and sold five high value assets of £1m+.
In a rapidly evolving situation, we moved the format of our commercial auction to an online only platform in order to safeguard staff, clients and buyers during the epidemic.
We are well placed to host an online auction having held two previously, however, this change had been imposed on an already nervous market.
Despite this, clients and buyers, many of whom had never used an online property auction platform before took a leap of faith and responded to the new way of working with great resilience to register in large numbers in just a week.
In the run up to the auction, appetite remained for some of the auction’s strongest investment opportunities, with 26 selling prior to the day, including the biggest lot of the auction. Lot 97, a B&M Store in Wales, let on a lease until 2031, sold at £3.475m, 7.4%.
Lot 51, a multi-let high street retail investment, comprising three stores in Oldham sold after an extensive private treaty campaign, just under the guide price of £2.1m.
On the day, investments with development opportunities and high street assets such as pharmacies and convenience stores that are likely to still stay open and generate rent during the epidemic, attracted strong demand.
The online auction started with ferocious bidding for the first two lots, both let to retailer and pharmacist, Boots. Lot 1, located in Halstead, Essex, was let on a lease until 2063, having over 42 years unexpired. The combination of a long lease and one of the most secure covenants on the high street was at the very centre of private investor demand, and after competition it sold at £730,000, 4.5%.
Lot 2, a shorter lease to Boots in Worcester Park, sold at £592,000, significantly above the guide price of £525,000, at a yield of 5.2%
George Walker, Partner and Auctioneer said: “Achieving sales of over £27m was a huge credit to our team, our clients and community of buyers who had to adapt very quickly and follow our guidance as the market and auction process evolved into our online format over 10 days.
These are challenging times. When the very essence of rent collection from real estate is being challenged, we enter uncharted territory. Every public property company has recently felt the need to declare the percentage of rent payments received from the March quarter – this alone adds a whole new element of risk for private investors to account for. As they have shown, our buyers are cash rich, flexible and willing to adapt to new ways of working which is a credit to them and we are grateful to our community of staff and clients that have worked with us to host the March auction.”
We will be hosting our next commercial auction on 19th May.
Notes to editor
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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.