Allsop raised a total of £71.5m, selling 129 properties under the hammer at its successful October commercial auction.
Across asset classes, 21 investments sold at £1m or more, but retail was the most dominant sector of the day, making up 78% of the sales overall. This included lot 52, the largest lot sold at the auction, selling for £2.85m, 6.6% net. Comprising of a 54,225 sq ft retail unit, the investment is prominently located in the town centre of Gravesend, Kent, and let to B&M until 2031.
However, the auction started with the sale of a shop let to Savills, located on The Green, Ealing. The lot attracted a bidding war which resulted in the investment selling at £610,000, 5.7%. Throughout the day, bidding among investors was most vigorous for lots in London and the South East, particularly for mixed use investments or those that offered long term development potential; one portfolio of five lots sold at yields down to 3.1% at an average of 5% overall.
An early example included lot 7, a single letting on King Street, Hammersmith, opposite Primark and located just 300 metres from Hammersmith Underground station. Competition was fierce, with the hammer falling at £1.59m, reflecting 4.1% net, and market demand for well-located freehold assets in London.
The spread of yields in the retail sector has become ever wider, from 3.1% to over 15% for some of the weaker towns where the income risk is much greater and buyers are seeking a more significant risk premium. One such example included lot 114, a parade of five shops on Union Street, Torquay, let to strong tenants, including Vodafone and Holland & Barrett, but on very short leases. The investment sold at £1.2m, 15.4% net, reflecting the significant income risk. On the day, this high yield was countered by other much lower yields, where buyers have greater faith in the longevity of the income and rents are not perceived to be too high and might show some early growth.
Appetite for alternative investment remains unabated and the demand for long leases with good covenants and built-in rental increases is as strong as ever. Lot 43, a NCP car park investment in Lincoln, let until 2044 at £83,720pa with annual increases of 2.75%. The price of £1.73m (4.5%) achieved, reflects the appetite and the value investors place on long, solid income streams with guaranteed growth.
George Walker, Partner and Auctioneer at Allsop said: “After a long summer, selling 129 properties and raising £71m gave a welcome boost to a market where uncertainty and failing deals had become the norm. There is clearly plenty of cash among willing investors, but these buyers have a wide choice of stock to look at, some of which has been languishing on the market for some time.
“With informed and accurate pricing, good information and a clear deadline, the market has shown that transactions can be achieved even in these uncertain times.”
The full results can be viewed on the Allsop website. Allsop’s next commercial sale will be held on 9th December at The Berkeley, Wilton Place, Knightsbridge, London SW1X 7RL.
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.
- Where a guide price (or range of prices) is given, that guide is the minimum price at which, or range of prices within which, the seller might be prepared to sell on the date at which the guide price, or range of prices, is published.
- The reserve price is the minimum price at which the property can be sold.
- Both the guide price and the reserve price may be subject to change up to and including the day of the 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.
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