Acuitus raised £18.9m in its September sale, with a Royal Mail distribution centre in Kilmarnock making £1.4m.
Royal Mail recently signed a new 10-year lease with an option to break in 2026 on the 18,424 sq ft property (pictured) which generates annual rental income of £94,500. The lot sold for £200,000 above its guide price, and the purchase reflected a net initial yield of 6.3%.
Mhairi Archibald of Acuitus said: “The covenant of the occupier and the low site coverage of this institutional-grade asset generated strong investor interest and also showed the continuing level of demand for Scottish investments.”
Elsewhere in the sale, a trio of car servicing centres let to Halfords Autocentres in Birmingham, Bolton and Manchester sold for £1.13m, £1m, and £685,000, respectively, at yields ranging from 5%-6.3%.
Acuitus director David Margolis said: “The leases on these properties – with 14 years unexpired and featuring annual uncapped RPI-linked rent reviews – ensured concerted bidding”.
A 3,213 sq ft Co-Op store on Southwark Bridge Road, SE1, let for a further five years at a current rent of £93,237 per annum sold prior to auction at 6%. It had been guided at £1.5m. Acuitus director John Mehtab said: “Convenience stores remain popular as they provide the necessities which are indispensable to shoppers whatever the prevailing economic environment might be”.
In Bath, a Grade II listed mixed-use property adjacent to the Royal Baths at 7-8 Stall Street was sold for £1.7m. The property is held leasehold from the local authority and the shop is let to Schuh at a current net rent of £157,280 per annum.
Other retail assets sold at the sale included a parade of six shops on London Road and Swan Lane in Norwich’s city centre, producing an annual rental income of £92,555. The properties sold for £1.4m at a yield of 6.2%. Charlie Powter, Acuitus director, said: “We are seeing sustained demand from investors for assets such as this which have a good level of existing income but also present an opportunity to add value through asset management opportunities.”
Acuitus chairman Richard Auterac said: “There is no denying that the current economic headwinds are producing differing opinions among investors but this leads to opportunities.
“We are seeing assets becoming available that historically have been the preserve of the investment funds. Many of these assets have seen a dramatic reduction in price during the past 10 years or are development opportunities that the current owner no longer wishes to take forward.
“However, as the results of this auction show, commercial property still offers the potential long-term attractive income streams which preserve value notwithstanding a period of higher inflation.”
To send feedback, e-mail julia.cahill@eg.co.uk or tweet @EGJuliaC or @EGPropertyNews
