Investors were undeterred by the possible ramifications of the eviction moratorium being lifted last week and continued to target retail assets at the Acuitus commercial property auction on March 31st. The sale raised a total of £22.09m of which 70% was invested in retail property.
Acuitus Chairman, Richard Auterac, commented: “The lifting of the commercial property eviction moratorium was another milestone in the transition from the massively disrupted market that prevailed throughout successive lockdowns.
“It remains to be seen what fall-out this may yet still have but from our experience landlords and tenants have been able to find satisfactory solutions. The demand being shown for retail assets demonstrates confidence in the long-term potential of many UK locations to attract strong levels of shoppers or which offer scope for developing alternative uses alongside retail.”
Two substantial retail parades in Leeds and Birmingham were sold prior to the auction for a total of more than £5.3m while a three-property asset with development potential on Broad Street in the heart of Reading’s shopping area sold for £1.55m – around 50% ahead of its guide.
Leisure assets also proved popular. The Buzz Bingo Hall in Bradford which is let on an RPI-linked lease until 2039 and currently produces annual income of £98,279 sold for £1.77m. The net initial yield of 5.2% shown by the sale also reflected the demand for long term income and the potential of its 2.87-acre site.
Elsewhere in the auction, a trade counter investment in Wigan sold for £1.17m. The net initial yield of 5.9% showed there is strong demand for these assets which are essentially retail but also have a logistics “kicker”. A 10,819-sq ft warehouse property on a 0.29 site in Walton-on-Thames, Surrey sold for £880,000. The price of the latter reflected a yield of 4.8% and demonstrated the property’s potential scope for development.
Of the 34 lots offered, 29 sold and the average sale price was £762,000 with 20% of the lots achieving £1m-plus.
Acuitus Chairman, Richard Auterac, commented: “Not surprisingly given the economic situation and recent world events, investors are finely attuned to what assets they want. The process of balancing this demand with sellers’ expectations around pricing still requires in depth market knowledge, but as today’s auction showed the level of underlying demand is still strong with bidding for the significant majority of the lots comfortable exceeding expectation.
“The tangibility and long-term stable income of property appears to be attracting more investors as a consequence of the growing concerns around rising inflation and inadequacy of investment income to cover the rise in the cost of living. Recent volatility in equities and the finance market plus falling bond prices have led to much comment about an increasing number of people in older age groups considering the postponement of their retirement or taking part-time employment to supplement their income.
The next Acuitus live-streamed auction of 2022 will take place on Wednesday May 18th and will provide online, telephone and proxy bidding.
