The final Acuitus auction of 2021 raised £22.7m with a success rate of 94% as investors showed no sign of being deterred by the current impact of the Omicron variant. A third of the lots offered sold for more than £1m and the average price achieved for all properties sold was in excess £800,000.
Acuitus Chairman, Richard Auterac comments: “The sale clearly showed the undiminished demand from investors who have confidence that the Omicron variant will be countered, and life will return to normal sooner rather than later. The feeling from “the room” is that the year has ended on a high, which bodes well for investors looking to place funds into commercial property and mixed-use residential schemes in town centres in 2022”.
In Dundee, the Wellgate Shopping Centre sold for £1.4m, well in excess of its £500,000 guide price. It comprises 76 retail units over ground, first and second floors and is let to tenants including B&M, Superdrug, Home Bargains, JD Gyms, Poundland, and Burger King. Acuitus’s Scotland consultant, Mhairi Archibald comments: “This was an especially complex asset and an intimate understanding of the asset from a management and cash flow perspective was a perquisite for a successful sale. Fortunately, we were acting for a highly skilled major fund manager.” Acuitus Investment Director, Peter Mayo added: “Investor appetite for shopping centres with large in-town footprints continues. This asset provides current income and the potential for substantial cash flow after active asset management and repurposing.”
30% of the properties sold were over £1m. The largest lots sold included a retail investment with a separately accessed Pilates studio and offices above in Weybridge, Surrey, and a major freehold town centre development opportunity fronting Friar Street and Market Place in Reading. Both sold prior to auction. Acuitus Director, Charlie Powter comments: “The scale of these investments and the investor demand they attracted demonstrate that buyers have substantial funds to invest in re-purposing assets in good retail locations”.
The largest lot sold on the day was £2.485m for a freehold retail and land Investment with residential redevelopment potential in Dagenham, East London. The former public house building on a 0.24-hectare site produces an annual income of £126,306. It is let on leases outside the Security of Tenure Provisions of the Landlord and Tenant Act 1954 and with a landlord option to determine the leases. Acuitus Investment Director, John Mehtab comments: “The site is located opposite a new residential development, opening up its potential for redevelopment into a number of uses and immediate catchment area for commercial use”.
Elsewhere in the sale, a long leasehold, part ground floor Sainsbury’s Local convenience store in South Croydon let on a new 15-year lease with a 10-year tenant break and five-yearly CPI-linked rent reviews sold for £805,000 at a yield of 5.3%. Acuitus Investment Director, David Margolis comments: “The ‘bond-like’ qualities of an asset such as this – let on a new lease to a strong covenant and with guaranteed rental uplifts – are hugely popular with investors who can benefit from the yield gap offered by the continued low cost of borrowing”.
Industrial investments remain popular with a terrace of three dated units close to junction 34 of the MI at Sheffield selling for £912,000 at a yield of 6.4%
The first Acuitus auction of 2022 will take place on February 17th and will be broadcast via livestream on the Acuitus website with bidding online, by telephone and by proxy.
