When we published our auction date of 12 May many queried whether we, like most other major auction houses, had made a mistake.
A mistake in selecting a date which meant that the marketing would run either side of a general election.
Over the last year many agents and auctioneers had noticed a definite increase in appetite from private investors and a sense that they were beginning to look again at properties outside of London and the South East in order to increase their returns.
Prior to election day, and despite reports of the potential for the market to be frozen by the uncertainty of a hung parliament, we certainly noticed no slowdown in this trend and were expecting a successful sale.
This was borne out with more than 92% of lots selling – our highest success rate for more than a year.
It may be possible, however, that those vendors already marketing their properties – whether by private treaty or by auction – benefited from increased confidence after a majority government was secured by the party widely perceived to be good for business.
The auction day saw strong bidding from private investors not just on those assets which have always been safe from the fluctuations of the market – in central London or with long leases to strong covenants – but also on secondary retail properties outside the major cities, let to local traders or even currently vacant.
These types of properties are only traditionally bought when people believe they can find tenants for empty shops or can re-let trading shops should they become vacant.
Now that the initial reaction to the election has settled down and we are starting to hear the first policies from the new government, investors are trying to gauge how they are going to affect the commercial property market.
The first major initiative seems to be the increase in the devolution of power away from London and to the regions.
The process, already started by the expansion of enterprise zones, should continue to have a positive effect on commercial property investment if local authorities really are given the powers to provide the specific support needed to local areas rather than following a generalised plan set down by Westminster.
Throughout the country the biggest challenge facing high streets continues to be the ability to attract tenants into empty units and any tools which are granted locally or nationally – including business rate exemptions – can only benefit this process.
Last autumn the coalition government announced that it would undertake a structural review of business rates. There has since been a call by The British Retail Consortium to maintain momentum with a full review of the system.
The government has already stated that it aims to raise the same amount of money it always has done from business rates but the consensus among traditional retailers is that this needs to be done by ensuring that internet-only retailers somehow pay their share.
It is important for the market in lower value (sub-£1m) retail properties, which form the majority of those sold at auction and also those purchased by private investors, that more is done to
help local traders and smaller multiple operators as business rates continue to hamper them.
This would be a shame at a time when investor confidence is at the highest it has been for some time.
That mood is beginning to filter through to vendors with an increase in stock being brought to market and busier auction rooms than we have seen for some time.
