May Commercial Property Auction Market Update

Market Settles

After a fairly busy March the commercial auctions market slowed down to some extent in April. Most likely this wasn’t so much a reflection of the market, but more due to the fact the Easter break and school holidays meant the market took an enforced break.

Major commercial auction house Acuitus didn’t schedule a sale in April, nor did Bond Wolfe in the Midlands. However, let’s look at a few results from the sales that were held.

Allsop’s April commercial auction featured 94 lots ranging in size from £50,000 to £3.25m guide prices. It included 11 lots guided at or over £1m. The flagship lot at the sale, a freehold supermarket and residential investment in Worcester Park, KT4, did not sell at the sale and remains on offer at £3.1m.

However business was brisk for the other large lots at the event. A freehold shop with lapsed planning for residential in London N12 sold for £1.77m (5.32% yield). Another freehold shop in London SW19 sold for £1.71m (4.41% yield). A freehold trade counter investment in Canterbury, Kent, sold for £1.3m (7.98% yield). A freehold shop in London SW17 sold for £1.05m (5.27% yield) as did what was described as a ‘freehold part built development’ in London, SW16 (£1m sale price). A freehold educational and residential investment in Egham, Surrey, on offer at £1.5m did not sell however.

Speaking ahead of the auction Alex Neil, Commercial Auction Partner at Allsop, said: “With the ongoing challenges in the global financial markets, real estate stands out as a resilient asset class with the potential to deliver more solid returns and long term income, which many will seek. Our new catalogue spans a broad range of lot sizes and sectors, providing buyers with plenty of choice. We look forward to an insightful start to May, with our auction once again acting as a barometer for investor sentiment in times of volatility.”

Savills mixed April sale offered 63 commercial lots. The flagship commercial lot at this sale, a creative hub featuring two ground floor event spaces, dark kitchen and nine serviced apartments on the upper floors on Camden Road, London N7, was withdrawn and moved to a later sale. As was a public house investment in Kirkcaldy, Fife. A sizable property in Enfield, Greater London, with approved planning permission for ground floor commercial premises and 23 flats on the upper floors sold prior to the sale.

There seemed to be brisk business for retail properties. These included a high yielding freehold retail investment in Redruth, Cornwall, let to a national retailer which sold for £1.1m.  A rarely available prime retail property on Kings Road, Chelsea SW3, let until 2029, sold for £500,000 with similar retail lots on the same desirable street selling for £492,000 and £455,000. In Barry, South Glamorgan, a high yielding retail investment let to a national retailer sold for £600,000. In Hythe, Kent, a freehold mixed use retail/residential investment sold for £455,000. A prime multi-let retail investment in Cheltenham sold for £585,000 and a five-unit retail parade in Sunderland sold for £588,000.

It seems like it will be a busy May for Savills with three days of mixed sales scheduled.

Looking ahead – and despite the fact that there are two more bank holidays – May looks likely to be busier in commercial auctions. That is, at least in terms of the numbers of lots offered.

The catalogue for the Acuitus commercial property auction on May 15 already has 47 lots listed and features 12 properties with guide prices of £1m-plus.  Richard Auterac, Chairman of Acuitus comments: “London assets remain a top priority for many investors and the quality of the properties in this auction will attract a high level of interest. The catalogue also features a wide range of value-add opportunities from across the UK including commercial ground rents, development opportunities, High Street retail, and industrial warehouses.”