The UK commercial property auction sector saw 239 lots sold for a total of £116.9m in the second quarter, in line with the long-term Q2 average of £118.7m.
The latest Acuitus cPad report, which uses sales data from Essential Information Group, shows that the sale volume was down from the Q1 level of £175m.
However, the sale rate was significantly up on the previous quarter at 92% compared to 84%.
Greater London was a major draw for investors: 31% of the properties sold by value in Q2 were located in the capital, up 50% on the long-term average of 20%.
Smaller value lots dominated sales activity in Q2. Of the 239 properties sold, 172 were below £500,000. This represents 72% of lots by number and is the highest proportion of this price band on record.
The previous high was 69% in Q2 2012.
Acuitus said this did not suggest a flight away from the larger lots because the proportion of £1m-plus lots was consistent with previous quarters at 13% by number and 46% by value.
Chairman Richard Auterac said: “The pandemic saw a positive change in investors’ attitude to using technology for the purposes of acquiring property and the good auction platforms now put a far wider range of investors both locally and nationally in touch with investment opportunities.
“This might be manifesting itself with the increased depth of bidding for the smaller lot sizes which tend to attract more local investors. With property investment now easier to access, it is entirely possible that we will see growing investment by individuals in their local areas.”
Demand for leisure and mixed-use assets continued to be strong, accounting for 22% by value realised.
The retail and office sectors dropped to 61% and 9% respectively – compared to their respective long-run averages of 68% and 13%.
Yields
In Q2, the cPad Average All-Property yield was 7.57%, up from 7.42% but keener than the corresponding 2022 figure of 7.75%.
For prime assets, the yield moved out slightly to 6.02% in Q2 against a long-term average of 6.1%. For secondary stock, the yield was up by 19bp to 9.42%.
The cPad Average All-Property yield for Greater London softened 20bps to 5.9% against a long-term average of 5.64%, while the Rest of UK cPad Average All-Property yield was virtually unmoved on 8.42%.
The cPad Average Retail Property yield remained firm at 7.66%. Offices and industrial saw the largest increases in sector-specific yields. Yields for offices were up 56 bp to 10.03% and for industrial up 44 bp to 7.89%.
The increased activity in smaller lots sizes helped yields harden in the sub-£500,000 sector of the market, down by 12 bp on average to 8.26%.
Yields on larger lot sizes edged higher by 29-30 bp to 7.54% but still remain lower than for the smaller properties.
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