The Acuitus auction on May 18th highlighted the depth of investor demand for commercial property investments as it raised £23.909m from the sale of 94% of the lots offered on the day. The average price of the lots sold was close to £900,000 with a third of the properties achieving prices of more than £1m.
Notable among the lots sold was a freehold light industrial investment with redevelopment potential in South Norwood, London. Offered on behalf of Receivers and guided at £1.2m-£1.3m, the 15,234 sq ft property on a 0.25-acre site in Weaver Walk SE27 eventually sold for £2.02m at a yield of 4.25%.
Acuitus Director. Charlie Powter, commented: “Located near to the South Circular and close to a residential area, this property clearly has long-term redevelopment potential and this drove the bidding well above the guide price”.
London investments remain very popular with investors and the sale saw a freehold retail and office investment in Tooting SW17 which currently produces annual income of £205,862. It sold prior to auction at a price substantially over the guide of £2.95m.
Acuitus Director, David Margolis, commented: “A number of similar assets right across suburban London were sold with all demonstrating the strength of the London market. Upper floor residential – or the potential to convert – are no longer the ‘icing on the cake”; they now drive a substantial portion of value”.
Investor sentiment towards shopping centres has definitely become more positive with the depth of market interest increasing as centres come to market.
This was reflected in the sale of the Howgate Shopping Centre in Falkirk which generated 196 expressions of interest of which 18 registered to bid. The centre which has 185,000 sq ft of retail space is the principal centre in the town. It was offered with a guide figure of £500,000 and eventually sold for £2.32m.
Mhairi Archibald of Acuitus commented: “The Howgate Centre is a good example of the type of shopping centre which is attracting entrepreneurial investors who look to take advantage of these assets’ large city-centre footprints and opportunities to drive income. Bringing these assets successfully to market has become an Acuitus specialism”.
Highlighting current investor appetite for large in-town assets that offer ‘meantime’ income and future development potential, a vacant supermarket in Clacton-on-Sea sold on behalf of major fund managers for £1.405m, substantially more than the guide figure of £800,000.
Acuitus Director, John Mehtab, commented “This was a challenging asset which had become surplus to Sainsbury’s requirements, but is a clear opportunity to progress the next phase in the evolution of this town centre”.
The 30,835 sq ft property sits on a site area 0.89 acres and is let on a lease to Sainsbury’s which expires in July of next year.
Acuitus Chairman, Richard Auterac, commented: “This month’s auction really showed the growing level of proactivity among investors who are looking for asset management opportunities and are confident about the longer-term potential of many different types of commercial property.
“As the market continues to correct and legacy leases expire, recent data is indicating that the substantial levels of over-rent – particularly in the retail sector – are now abating rapidly and this is helping investors to understand the long-term opportunities of ownership.
Instructions are now invited for the next Acuitus broadcast auction of 2022 which will take place on Tuesday July 12th. It will provide online, telephone and proxy bidding. Further details here.
