Auction investors make good return
The high-net-worth investors dominated the room as auction house Acuitus raised £64.09 million at its latest sale. Commercial properties selling for more than £1 million were again prominent. The sale had a success rate of 82 per cent. Richard Auterac, Acuitus chairman, says: “Many of the lots offered at prices of sub-£1 million to £3 million-plus were in the sweet spot for high-networth private investors and offered good income streams based on current rental values. The retail sector investment is particularly benefiting from new sustainable rents and retailers with strong trading results.”
A Sainsbury’s convenience store, let on a new five-year lease with residential above, on Barnet High Street, north London sold for £2.64 million at a yield of 4.83 per cent.
In Grays, Essex, a freehold bank investment, let on a new 15-year lease to Bank of Scotland, sold for £907,000 at a yield of 4.9 per cent.
Highest price achieved in the room was £3.3 million, for 55-59 Hills Road, Cambridge. The investment comprises five shops, a restaurant, a nightclub, six self-contained residential units plus a vacant store with development Top achiever in Acuitus’s sale: retail, leisure and residential investment in Cambridge, fetching £3.3 million
potential. It produces current income of £181,443 and sold at a yield of 5.11 per cent.
Auterac says: “The auction featured a large number of good-quality shops in prime locations across the UK and also highlighted investor demand for secure income across the discount store, motor trade and industrial sectors. The overall low average yield profile of the sale was a reflection of the quality of the assets sold.
“It was an emphatic return to the auction room for investors after the summer break. While there still may be questions about the economic outlook, investors are focusing on the income returns and asset management potential in all sectors of the commercial property market.”
Average price achieved by lots in the October auction was £865,000, with 22 selling for £1 million or more. Among other lots sold in this auction
was a freehold highly reversionary convenience store, office and residential investment in Cobham, producing annual income of £123,685. It went for £3 million at a yield of 3.8 per cent.
And a freehold retail investment in Kingston-upon-Thames, let to Reiss on a recently renewed 10-year lease with no breaks, sold for £2.475 million at a yield of 4.5 per cent.
The next Acuitus auction will take place on December 7 in London. EDITED BY CHARLIE JACOBY
People buy a £5 million London property to live in — not for a second home and not to rent out. Buying agency Black Brick says 57 per cent of its purchases in 2017 were for a primary home in London, up from 29 per cent of transactions in 2016.
The secondary-homes market is down, with just 14 per cent of properties purchased so far in 2017 intended as a secondary home, compared to 47 per cent in 2016.
Since April, Black Brick has acquired just over £40 million of properties, with an average deal size of £4.47 million, across 12 different postcodes and saved its clients an average of £540,000 on asking prices.
Camilla Dell, managing partner at Black Brick, says: “During 2017 we have seen a complete u-turn in primary versus secondary homes. This is a direct result of stamp duty land tax and the additional three per cent in tax on a second home or a buy-to-let. Fewer clients are buying for investment, or for discretionary second-home reasons. They are buying to live here and choosing London as their home, to be close to work and London’s excellent schooling options.”