Allsop has raised more than £30m from its rescheduled March auction, despite the unprecedented circumstances surrounding the spread of Covid-19 and resulting government restrictions.
The firm initially reported a total of £27m from a 69% success rate, selling 57 lots from 82 offered via an online-only platform in order to safeguard staff, clients and buyers during the epidemic. Five high-value assets of £1m-plus found buyers.
A week after the 31 March sale, this has increased to more than £30m raised from 64 sales – a 78% success rate.
Some 26 lots were sold prior to the auction, raising £16.7m; 26 were sold during the auction, raising £9.2m; and 12 have been sold since the auction, raising £4.6m.
This is only the third online auction Allsop has held and many of its clients and buyers had never used an online property auction platform before.
Over the 10 days prior to the sale, it was forced to move the format of its commercial auction first to a live-streamed event with remote bidding and then to an online sale with just a week to go as government restrictions rapidly evolved.
Despite this change being imposed on an already nervous market, many clients and appear to have taken a leap of faith and responded to the new way of working. However, the number of lots offered was down from the 163 assets originally catalogued for the ballroom sale.
In the run up to the auction, appetite remained strong for some of the auction’s most attractive investment opportunities, with 26 selling prior. These included the biggest lot of the auction, a B&M Store in Wales (pictured), let on a lease until 2031, which sold for £3.475m – a 7.4% yield.
A multilet 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, which are likely to 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 more than 42 years unexpired. The combination of a long lease and one of the most secure covenants on the high street proved highly attractive to private investors. After competition it sold for £730,000 – a 4.5% yield. Lot 2, a shorter lease to Boots in Worcester Park, sold for £592,000, significantly above the guide price of £525,000, at a yield of 5.2%.
Speaking immediately after the sale, George Walker, partner and auctioneer at Allsop, 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.”
Allsop will be hosting its next commercial auction on 19 May.
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