Bidders send out confident signals
BUYERS AT auction are being a little more daring than usual — and this may be a sign of a stronger market for property in the autumn. Wellpriced vacant industrial stock, tenanted retail units and residential properties in Greater London and the Home Counties ticked buyers’ boxes at Andrews & Robertson’s June auction, where revenues peaked at £7.8 million.
The Grand Connaught Rooms sale brought 61 residential and secondary commercial lots to the market and 41 sold, a 68 per cent success rate.
Robin Cripp, A&R auctioneer, says: “Our June sale was one of our smaller events and brought higher volumes of lower-value stock than in previous months, so we were pleased by the outcome. Pricing was fairly low on some properties to reflect risk or the need to upgrade, but it shows that almost anything will sell if priced correctly.
“Some vacant industrial lots sold, which bucked the general trend at present. They were low-value and more easily self-funded, which added to their appeal, especially for private investors looking for rental yield well above those achieved by keeping money on deposit. Buyers are being choosy and the price of the property must reflect whether they have inherent difficulties, risks, or whether they are in good condition. It all comes down to price and location and risk.”
Residential properties in popular locations caught the eyes and captured the hearts of investors. Flat 2, 30 Maida Vale, London, W9, a long leasehold two-bedroom flat in a renowned catchment area, was inspected by more than 40 prospective bidders. Sale price was £455,000 over a guide price of £385,000 plus. Meanwhile, 27 Melbourne Road, Ilford, Essex sold for Mountview Estates. The freehold four-bedroom terraced house, viewed by more than 50 people, was knocked down for £425,000 against a guide price of £350,000 plus. A&R’s next sale is on July 26.
Acuitus has launched the catalogue for its July 10 auction, which will offer 50 lots, representing retail, office, industrial and leisure investments with a total rental income of around £3.1 million. Lots are offered on behalf of clients including The Co-Operative Estates, Southampton City Council, Chancerygate Asset Management and a major institutional fund, together with administrators at Deloittes LLP, Ernst & Young LLP and receivers at Grant Thornton, Jones Lang LaSalle, Knight Frank and Wedlake Bell.
Among properties in the auction are a freehold residential opportunity with vacant possession in London’s Bloomsbury, occupying approximately 203 sq m (2,185 sq ft). Guide price is £1.5 million.
The government’s lending initiative, which can result in immediate cashbacks for commercial and residential property investors, is further encouragement for borrowers who are already enjoying the benefits of low swap rates. Under the scheme, certain lenders are now offering a drawdown or a reduced interest margin for a fiveyear term loan. For a loan of £1 million, one lender is paying an average cashback of £44,000 — which would cover all of the deal costs and leave the borrower with surplus cash. Other lenders are reducing interest-rate margins to levels of three per cent over base rate or swap rates for a five-year term.
Stuart Buchanan of Acuitus Finance says: “With swap rates at their lowestever levels, it is possible to fix a rate for five years at 4.2 per cent. Any property investor who needs to refinance now has a number of attractive options open to them.
“Acuitus Finance provides clients who need to refinance with a review of the finance terms currently available to them.”