The latest Commercial Property Auction Data (cPAD) Market Flash shows that the latest round of commercial property auctions in July saw an exceptional sale rate of 92%.
More than £141m of assets sold during the July auctions with all the office and London assets offered finding buyers.
Acuitus’s Richard Auterac comments: “Demand remains well ahead of supply with many owners still choose to retain assets rather than sell. The difficulty of re-investing sale proceeds and finding an equivalent return is one reason why some owners prefer to hold”.
Average yields softened slightly in July but this was a consequence of a larger number of secondary properties being offered rather than a weakening in prices.
Auterac observes: “Sellers see that investors are prepared to take more risk for properties which offer active management opportunities and are meeting this demand with secondary properties which fit this profile”.
This trend was reflected in the 100% sale rate of office properties – many of which provided opportunities for alternative use.
The strength of the London market was once again demonstrated by the latest sales as average yields hardened by 26 basis points to stand at 5.72%.
However, the commercial property auction room is now less dependent on the demand for London assets – only 13% of the lots offered in July were located in the Capital.
To download the latest cPad Market Flash, please click here
