Allsop’s latest commercial auction marked a turning point for the market, raising over £76m, the auctioneer said this week.
Of 177 lots offered at the 16 October sale at the Park Lane Hotel, W1, 148 sold, including 14 prior – a success rate of 84%.
The highest-value lot was Liverpool’s Cavern Walks, which includes the famous Cavern Club music venue. It sold for £4.1m – a 26.2% yield. The property provides an income of £1.1m pa, but this is due to drop steeply when office tenant Direct Line leaves in the next 12-18 months.
The freehold to the five-floor Cavern Walks, which includes 23 shops and 80,000 sq ft of offices, was offered by receivers at Deloitte, following the winding down of Warner Estate earlier this month. It was offered with a guide price of £1m.
It was bought by a private Liverpool-based property company, which saw off competition from Northern Irish and South African bidders.
The second largest lot was a freehold on the 25,751 sq ft Blue Boar Row in Salisbury, Wiltshire, which sold for £2.7m – a net initial yield of 7.91%. The property is let to Lloyds TSB until mid-2021 and provides an income of £230,000 pa. It was sold by a private Irish pension fund to a buyer from the West Midlands.
In total, 18 lots sold for more than £1m, with four going for over £2m. Allsop received more than 3,000 requests for legal documentation – an average of 16 per lot.
A cosmopolitan room saw overseas interest hotting up, with buyers from locations including France, Hong Kong, India and South Africa increasingly looking outside the M25.
Allsop partner and auctioneer George Walker hailed the sale as the biggest commercial auction since December 2009, with a “tremendous depth of buyers” branching out into the regions.
“Commercial auctions had not been as flat-out [as residential], but this sale was the turning point – two years ago it was all about London and the South East. Now, those areas are getting a massive premium, but buyers are looking right across the country,” he said.
“We are still in a low-inflation, low-interest environment, and people are still thinking let’s get a good yield. We are seeing similar assets attracting stronger prices than in 2008 and 2009.”
chris.berkin@estatesgazette.com
