The second Acuitus auction of the year saw the sale of £53.32m of commercial property assets with 85% of the lots offered finding buyers.
Strong buyer demand coupled with the increased availability of debt finance is making the auction room a platform for concerted buying – particularly from private investors.
Acuitus auctioneer, Richard Auterac, comments: “It is clear that a ready supply of financing is helping investors access the market.
“Loan rates have hit historic lows in the last few weeks and this is enabling buyers to gear up and make their own equity go further when targeting assets.”
Sellers are now also recognising that auctions are a more efficient – and often more productive – means of bringing portfolios of properties to the market.
Auterac comments: “Sellers are responding to the certainty of the auction process. In the space of less than six weeks at our last two sales, we have achieved for one client alone unconditional sales of more than 40 properties. They have realised that this is a more efficient route to market and, in several instances, have achieved better prices than were being sought through private sales.”
The March auction saw the sale of 67 properties in total at an average sale price of just under £800,000. The highest price was achieved by a freehold retail investment at 13-14 The Parade Canterbury. Comprising two shops in a prime location it sold for £2.7m
Three Iceland stores in Portchester, Gravesend and Falmouth all let on leases running until 2030 with fixed rental uplifts sold for £1.02m, £2.31m and £1.065m respectively at yields of between 4.4% and 6.2%.
The auction also highlighted investor interest in industrial assets with short-term income. Units in Nottingham and Rotherham with four years to the expiry or break sold at prices reflecting yields of
7.75%. Investors took advantage of the multi-channel bidding facilities at Acuitus auctions with the Nottingham industrial lot selling to an internet bidder. Richard Auterac comments: “Our two sales in the first quarter of 2016 have demonstrated the distinct preferences of different investor groups -all of which are being satisfied by the range and quality of assets we’re offering.
“Whilst Brexit and other macro-economic influences may have brought some uncertainty into the market for large-scale commercial property assets, there is now tremendous momentum in the sub-£10m asset band which the auction room serves, and this is being increasingly driven by private investors.
“We have now sold more than £110m of assets in the first quarter of this year which is 67% more than the corresponding volume in 2015.”
Other lots sold in the auction included:
The third Acuitus auction of 2016 will take place on May 19th at Radisson Blu Portman Hotel, 22 Portman Square, London W1H 7BG
