The latest Acuitus auction highlighted the depth of investor demand for commercial property investments, with all but two lots snapped up and a third of the properties achieving prices of more than £1m.
The 18 May sale raised £23.9m from the sale of 27 lots from 29 offered – a 94% success rate. A further six lots were withdrawn prior. The average price of the lots sold was close to £900,000.
Notable sales included a freehold light industrial investment with redevelopment potential in South Norwood, SE27. Offered on behalf of receivers and guided at £1.2m-£1.3m, the 15,234 sq ft property on a 0.25-acre site in Weaver Walk eventually sold for £2.02m at a yield of 4.25% (lot 11).
Acuitus director Charlie Powter said: “Located near to the South Circular and close to a residential area, this property clearly has long-term redevelopment potential and this drove the bidding well above the guide price.”
London investments remain very popular with investors, and the sale saw a freehold retail and office investment in Tooting, SW17, which currently produces an annual income of £205,862. It sold prior to auction at a price substantially above the guide of £2.95m (lot 9).
Acuitus director David Margolis said: “A number of similar assets right across suburban London were sold, with all demonstrating the strength of the London market. Upper floor residential – or the potential to convert – are no longer the ‘icing on the cake’; they now drive a substantial portion of value.”
Investor sentiment towards shopping centres has definitely become more positive, with the depth of market interest increasing as centres come to market.
This was reflected in the sale of the Howgate Shopping Centre in Falkirk (pictured), which generated 196 expressions of interest of which 18 registered to bid. The centre, which has 185,000 sq ft of retail space, is the principal centre in the town. It was offered with a guide figure of £500,000 and eventually sold for £2.32m (lot 35).
Highlighting current investor appetite for large in-town assets that offer “meantime” income and future development potential, a vacant supermarket in Clacton-on-Sea sold on behalf of major fund managers for £1.405m, substantially more than the guide figure of £800,000.
Acuitus director John Mehtab said: “This was a challenging asset which had become surplus to Sainsbury’s requirements, but is a clear opportunity to progress the next phase in the evolution of this town centre.”
The 30,835 sq ft property sits on a site area of 0.89 acres, and is let on a lease to Sainsbury’s which expires in July of next year (lot 15).
Acuitus chairman Richard Auterac said: “This month’s auction really showed the growing level of proactivity among investors who are looking for asset management opportunities and are confident about the longer-term potential of many different types of commercial property.
“As the market continues to correct and legacy leases expire, recent data is indicating that the substantial levels of over-rent – particularly in the retail sector – are now abating rapidly, and this is helping investors to understand the long-term opportunities of ownership.”
The next Acuitus sale will take place on 12 July.
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