A public house/hotel investment in an affluent area of Dorset featured among the lots sold at the Acuitus commercial property auction which raised £19.05m on May 18th.
The Anchorage on Haven Road near Poole sold for £2.2m at a yield of 5.13%. The gastro pub and six-bedroom hotel is on the main route to the prime residential area of Sandbanks and its cluster of multi-million pound homes. It is currently let to Greene King on a new 20-year lease running from September 2022 without break at a rent of £120,000 pa.
Jon Skerry of Acuitus comments: “The quality of this asset and its close proximity to Sandbanks ensured strong investor demand and The Anchorage did not disappoint with concerted bidding from several parties”.
Also in the sale, there was strong demand for a vacant 10,600 sq ft office building on the Randalls Way Business Park in Leatherhead. It sold for £1.74m.
Charlie Powter of Acuitus comments: “We have read a lot recently about the lack of interest in offices. This is not the case in the private investor market where there is demand for well-appointed modern accommodation with good transport links. In this particular case there was also demand from residential developers who were considering the property’s potential for conversion through Permitted Development Rights”.
In London, a five-storey mixed-use investment in Parsons Green sold for £1.56m at a yield of 4.45%. The property at 295 New Kings Road is let to an Italian restaurant trading as Nuovi Sapori and also features a six-bedroom maisonette which may be suitable for refurbishment or reconfiguration. It currently produces an annual income of £74,000.
David Margolis, investment director at Acuitus comments: “Properties with income-producing ground floor space plus the opportunity to create new residential accommodation on the upper floors remain extremely popular with investors. Demand definitely exceeds supply for these London assets”.
A 13,656 sq ft trade counter investment close to the centre of Wigan sold for £1.21m at a yield of 7.0%. Let to Formula One Auto Centres Limited until 2037 with a tenant break in 2032 and Clifton Trade Bathrooms until 2032, the investment currently produces annual income of £90,932.
John Mehtab, investment director of Acuitus comments: “We were selling for a major fund and this sale demonstrates the renewed strength of demand for roadside out of town retail investments.”
Recent weeks have seen more positive investor sentiment towards in-town shopping centres. At the Acuitus auction, the 70,469 sq ft Castle Place Shopping Centre in Trowbridge attracted more than 100 expressions of interest before selling prior to auction for around three times its guide price of £400,000. It sits on a 1.73-acre site on Market Street.
Richard Auterac, Chairman of Acuitus comments: “As this sale showed, buyers are more confident in the long-term prospects for assets across all the property sectors believing a pricing inflection point has been reached. Notwithstanding the latest Bank of England interest rate rise, this positive belief led to the strongest buyer interest across the board since last autumn.
“Part of the success was attributable to the quality of assets at this auction where prices have remained firm and transactions occur smoothly and quickly. This is giving rise to more sellers bringing the higher quality assets to auction in order to capitalise on serious investor demand which remains unabated.”
The next Acuitus auction of 2023 will take place on Thursday July 13th and will provide online, telephone and proxy bidding.
