The Autumn Budget appeared to strengthen investor appetite at the penultimate Acuitus auction of 2021, held on 4 November, which raised £16.47m with a success rate of 91%.
Acuitus chairman Richard Auterac commented: “The recent Budget announcement of business rates relief, both the 50% reduction and the improvement relief, has resulted in positive sentiment from private investors towards retail, leisure and hospitality assets at auction.
“Investors see the improvement relief as a welcome addition that will encourage innovation and the overall enhancement of buildings to ‘green’ and future-proof them for decades to come, allowing them a means to capitalise on property and lettable values. The 50% rates reduction will act as a stress relief for those occupiers recovering post-lockdown, which investors view as a means to look increasingly at investment into the retail, leisure and hospitality sectors.”
The highest-value lot sold was a public house investment in London’s Aldgate (pictured), which went under the hammer for £1.95m at a net initial yield of 4.3% (lot 38). It produces a current annual rent of £90,000, rising by £15,000 per annum to £165,000, and is let to The Oliver Conquest pub until 2031 on a fully repairing and insuring lease. The vacant Wheatsheaf public house in Stanwell, Surrey, sold for £805,000 – double its guide price (lot 23).
Also of note was the sale of a freehold town centre retail investment in York for £1.42m, a net initial yield of 6.9% (lot 17). It is let to Lakeland until 2025 and produces a current annual income of £105,000.
Acuitus director Charlie Powter said: “The property sold well above its guide price, demonstrating the demand for retail assets in key locations, where there is a long-term occupier such as Lakeland, which has been in occupation for more than 18 years, and the rent is priced at today’s values. We see this as a turning point in the attitude of skilled property investors as they adopt a more positive approach to selective high street locations.”
A substantial office investment in Shirley in the West Midlands sold for £1.22m at a net initial yield of 6.4% (lot 15). The 18,648 sq ft building is multi-let and produces a current annual income of £89,167.
Acuitus director John Mehtab commented: “In-town offices with residential development potential are of strong interest to investors looking to create live-work hubs for occupiers and developers looking to future redevelopment. Shirley is an attractive Birmingham suburb and is undergoing significant residential rejuvenation.”
Investor demand also proved to be strong for assets in the capital, with a freehold retail parade and residential ground rent investment in Kennington – comprising eight retail units, with all the flats above sold off on long leases – achieving a price of £1.06m at a net initial yield of 6.7% (lot 7). It produces annual income of £76,115.
Elsewhere, two freehold retail and residential investments in Shepherds Bush, each comprising a single let shop and a pair of two-bedroom flats, sold for £1.32m and £690,000 at net initial yields of 6.5% and 6.7% respectively (lot 6). They produce annual rental incomes of £91,400 and £49,120.
Acuitus director David Margolis said: “London lots, particularly those of retail parades with residential offerings, where development opportunities can be released under effective asset management, are proving highly popular to private investors. These are particularly sought-after where the income, both current and prospective, and the location are right.”
The final live-streamed Acuitus auction of the year will take place on 13 December, with bidding online, by telephone and by proxy.
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