Samantha Jenkins
Private investors paid good prices for quality retail investments but took a view on some of the other lots at Cushman & Wakefield Healey & Baker’s London auction last week.
The auction raised £15.6m on the day from 70% of the 43 lots, although a deal struck the day after the auction pushed these figures up to £17.1m and 72% respectively.
Auctioneer John Townsend said the message was that private buyers looking to buy the right product would pay premium prices. But although that market was “strong”, he added that buyers were “very discerning” and would not pay top price for investments in a poor position or producing high-yielding, poor-quality income.
The keenest yield achieved was 5.8% on a shop in Gosport High Street, let to Holland & Barrett for 17 years, which “romped away” to sell for £253,000.
“Yes, it is a relatively small lot, but it’s a fairly hairy yield,” said Townsend. He said that he was particularly pleased with the £2.258m sale of a long-leasehold shop investment in High Street, Walthamstow, E17.
Let to Woolworths and Granada, and guided at between £2.15m and £2.175m, the shop was expected to hit the top end of the guide price range but sold off a 7.7% yield.
“All in all, I think the sale had a good result,” said Townsend. “Although some might say that it was not up to our usual standard, there were quite a few lots on which we were taking a view and about which the vendors were optimistic.”
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Retail:auction prices v IPD Shop Capital Values* |
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Growth in the Retail Property Price Index was 6.9% for the 12-month period to end 2001. This compares with -3.8% for the valuation-based IPD shop capital value index. Strong private investor demand and a sharp fall in the cost of finance earlier in the autumn produced a further strengthening in yields in the transactional market. |
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Source: Jones Lang LaSalle/IPD/ARAS *based on results for end of Q4 2001 |
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Interest rates and forward projection rates |
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A weekly table showing the cost of borrowing over various periods |
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1 Jul 00 % pa |
1 Jan 01 % pa |
1 Jul % pa |
1 Jan 02 % pa |
12 Mar % pa |
19 Mar % pa |
|
|
3-month LIBOR |
6.22 |
5.90 |
5.28 |
4.06 |
4.09 |
4.14 |
|
1 year |
6.54 |
5.79 |
5.68 |
4.47 |
4.78 |
4.76 |
|
5 years |
6.60 |
5.83 |
6.00 |
5.61 |
5.61 |
5.63 |
|
10 years |
6.48 |
5.78 |
5.98 |
5.58 |
5.61 |
5.62 |
|
6-10 years* |
6.36 |
5.73 |
5.96 |
5.55 |
5.61 |
5.61 |
|
20 years |
6.24 |
5.51 |
5.88 |
5.36 |
5.50 |
5.49 |
|
11-20 years* |
6.00 |
5.24 |
5.78 |
5.14 |
5.39 |
5.36 |
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* Forward projection rates. Note:If a 10-year or a 20-year swap is broken after five or 10 years the interest rate indicated illustrates current assumptions on forward rates for calculation of breakage costs/profits for the unexpired term |
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Source:Allsop Selwyn |
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Forthcoming auctions |
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Auctioneer |
Phone |
Date held |
Auctioneer |
Phone |
Date held |
|
London |
Rest of UK |
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Drivers & Norris |
020 7607 5001 |
29 April |
Webbers Commercial |
01271 347888 |
5 April |
|
CWHealey & Baker |
020 7629 9292 |
1 May |
Dawsons |
01792 646 060 |
9 |
|
Athawes Son & Co |
020 8992 0056 |
8 |
William H. Brown (B’pool) |
01253 607600 |
9 |
|
FPDSavills (London) |
020 7730 0822 |
13 |
Weaving & Partners |
0151 708 8484 |
9 |
|
Colliers CRE |
020 7935 4499 |
14 |
Trembath Welch |
01371 872 117 |
9 |
|
Nelson Bakewell |
020 7544 2000 |
16 |
Manners & Harrison |
01253 612000 |
10 |
|
Strettons Stickley & Kent |
020 8520 8383 |
20 |
Pugh & Co |
01772 722 444 |
10 |
|
Sullivan Mitchell |
020 8944 8899 |
20 |
Stags Launceston |
01566 774 999 |
10 |
|
Allsop & Co (commercial) |
020 7437 6977 |
21 |
Christopher Bond |
01409 254238 |
10 |
|
Allsop & Co (residential) |
020 7494 3686 |
22 |
Astley Samuel Leeder |
01792 655891 |
10 |
|
Jones Lang LaSalle |
020 7493 6040 |
22 |
Shoulers |
01664 560 181 |
10 |
|
Allsop & Co (commercial) |
020 7437 6977 |
23 |
Paul Fosh Auctions |
01633 254 044 |
11 |
|
Harman Healy |
020 7833 5885 |
27 |
Clive Emson |
01622 630033 |
11 |
