Allsop sold its highest-priced commercial lot in nearly 18 months at its recent sale.
The four-floor office property in St Albans, Hertfordshire, was purchased for £7.1m by a London-based investment company off a guide of £5.75m.
With an annual rental income of nearly £390,000 and net yield of 5.14%, the building is an attractive investment in its current form. It could be converted into flats with planning approval in the long term, or the site could be redeveloped.
It is the highest amount paid for a commercial property at an Allsop sale since February last year.
Auctioneer Duncan Moir said the property featured a range of options for the new owner, which made it such a popular lot – one of the interested parties made bids from an island in the Indian Ocean.
Moir said that in areas such as St Albans, the value of offices had risen after many were converted into flats using permitted development rights, and the demand was still strong for office space.
The Allsop sale achieved a success rate of 83%, raising nearly £82.6m. Of 171 lots offered, 141 were sold, including 118 in the room and 17 prior.
Moir said: “It was a fantastic result with the market showing signs of uncertainty for all the reasons we know about.
“The appetite for the majority of the assets we had on offer was very strong,” he said.
A total of 22 lots sold for more than £1m, including a portfolio of buildings let to fashion chain New Look, which were bought by individual investors for a total of more than £4.5m from a guide of £3.5m.
“Income was king,” Moir said, adding that a number of lots offered opportunities to enhance value. Multi-let buildings were popular, he said, such as a six-shop parade in Devizes, Wiltshire, and maisonettes above, with a guide price of £750,000 which sold for £860,000.
A similar property in Rubery, Birmingham, with 12 shops and flats/maisonettes above, sold for £1.6m off a guide of £1.4m.
There was a lot of interest prior to auction in a property in Harrow, Middlesex, with a bank on the ground floor, and residential accommodation above. The lot came with planning approval for five flats on the upper floors, and sold for £1.1m after being guided at £950,000-£975,000.
A retail investment in Loughborough, Leicestershire, which included a Subway on the ground floor, and annual income of nearly £77,000, sold for £1m from a guide of £950,000-£1m.
The sale was held at Claridge’s, W1, on 10 July.
David Callaghan
