The latest quarterly figures show a year-on-year increase of 19% in the total raised from commercial auctions as cash-rich investors expand their portfolios and diversify.
Essential Information Group data shows that the commercial total hit £341.2m for July-September, a “notable increase” from £286.8m in Q3 2021. The number of lots offered and sold increased by just 6.1% and 7.2% respectively for the same period, confirming an increase in lots sizes handled at auction.
September’s commercial sales showed the same disparity, with the total raised up by 14% to £175.8m but increases of only 6.3% and 8.5% in lots offered and sold. Allsop accounted for more than half of the monthly total, having raised £104.3m. Some 36 of the 135 lots sold achieved prices of £1m and above.
These included several non-retail lots, such as a gym in Leeds let to Pure Gym with RPI-linked reviews, which sold for £3.41m (7.6% net initial yield). “During tumultuous times, it is only natural that investors want to diversify into other subsectors,” said Allsop partner and auctioneer George Walker.
Acuitus raised £18.9m in its September sale, with a Royal Mail distribution centre in Kilmarnock (pictured) making £1.4m. At least six of the 36 lots sold achieved prices of £1m or more.
Speaking at consultancy Prideview’s recent autumn market review, Acuitus investment director and auctioneer David Margolis said the average lot size in the London commercial auctions had reached £706,000 in H1 2022, up 19.3% on the 10-year average (Acuitus Research/EIG).
“That means sellers have had confidence in the auctions market, the finality of the auction contract,” he said. “Having an auction date is very important.”
Away from commercial, the picture is less positive for residential auctions and reflects the slowdown in the private treaty market.
The Q3 total is down by 4.2% to £790.5m and the September total is down by 6.8% to £359.2m.
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