Investors target quality as March auction raises £33.5m

Nearly a third of the lots which sold at Acuitus’s second auction of the year achieved yields of 6% or lower as investors continued to target high quality assets. The sale raised £33.5m from the sale of 49 lots with 10 properties selling for more than £1m.

Acuitus auctioneer, Richard Auterac, commented: “There was much more positivity in the room than at the first sale of the year when investors were still feeling their way into the new  year and adjusting to the political environment.

“The results continue to reflect the different investment objectives between high net-worth private investors who are looking for prime assets with secure income, and the more entrepreneurial property companies who are looking at opportunities for active asset management.”

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The strength of private investor demand for well-let, well-located assets was demonstrated by the first lot of the day: a prime convenience store investment in Salisbury. Let to One Stop Stores (part of Tesco plc) on a new 20-year lease with a tenant’s break option in 2028 and a current rent of £25,000pax, it sold for £511,000 at a yield of 4.7%. Larger lots also commanded prime yields with a shop in Haverhill let to Iceland until 2028 at a current rent of £115,000pax selling for £1.87m which showed  a yield of 5.7%

In terms of lots which presented active asset management opportunities, the highest price of the sale was achieved by the sale of the Abbeygate Shopping Centre in Nuneaton for £4.285m which sold to a private local property company.

The asset attracted a lot of interest as prospective buyers could be confident that it had been well-managed by its previous institutional owner, had strong support from the town’s shoppers and allowed a new owner to put their own mark on the centre as it adjusts to a new retail landscape. 

Richard Auterac reports: “Year-on-year analysis may show that fewer assets are being sold at auction than last year but this is purely because of a lack of supply. Demand remains as robust as it has been and we hope that more owners will recognise the exceptional selling opportunities that the market currently provides”.

Other sales at the auction included:

    South Street, Braintree: a freehold motor trade investment let to Kwik-Fit until 2027 with no breaks at a current rent £59,122pax sold for £1.115m at a yield of 5.0%
    Cheap Street, Sherborne: prime bank investment let to Lloyds Bank until 2021 and with two substantial flats on the upper floors sold for £1.195m at a yield of 5.2%
    Hatch End, London: a freehold restaurant and residential investment currently producing income of £54,900pax sold for £1.005m at a yield of 5.1%

The next Acuitus auction will take place on May 24th at the Radisson Blu Portman Hotel, 22 Portman Square, London W1H 7BG.

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