Allsop achieved a success rate of 81% on the day, now standing at 83%, with more than 70% of sales coming from retail assets, despite the reported gloom on the High Street.
December’s auction saw 25 lots sold at £1m or above, the highest proportion this year, raising £35.5m in total.
The longest and strongest let investments proved the most popular, with a portfolio of four regional job centers all selling at an average of 7.3%net. The average A grade retail yield remained steady at 6.2%, with £44.9m of retail assets sold.
Alternatives to retail saw competitive bidding, with £1.56m, 6.3% achieved for lot 107, an industrial asset in Batley, demonstrating the high demand for investments in this sector.
Lot 87, a Travelodge in Brierley Hill near Birmingham, was also popular on the day. Let on a long lease at £89,010pa with uncapped RPI increases, it achieved £1.45m 5.8% net.
Two of the largest lots sold were located in London; lot 114 a 1,205 sq ft freehold City investment close to Monument London Underground station, selling at £1.45m and lot 86, a block of seven flats and a commercial unit in Stoke Newington, selling at £1.96m 5.2%.
Mixed use assets are always popular, due to the inherent spread of long term risk; lot 26 in Eastbourne, let to Arcadia at £138,250pa, sold at £1.9m 6.8%. The price achieved reflected the investment’s excellent High Street location and the sub-letting of its two shops and three flats above, all on one lease. Retail tenants include Hotel Chocolat and Pavers.
Results from Allsop’s buyer survey revealed that 23% of buyers on the day were new to the auction room, with a greater number of investors coming from overseas, including Hong Kong, Canada and South Africa. This increase demonstrates that whilst the current political turmoil in the UK is causing paralysis and fear in some markets, a number of commercial private investors are taking advantage of the weak pound.
George Walker, Partner and Auctioneer, Allsop said: “The private investor from home and overseas is clearly looking at the longer-term nature of these assets and their ability to provide a solid income stream. With the pound offering good value and the availability of long leases, it is not surprising that we saw an increase in overseas interest. Overseas buyers can be more competitive than the home market as they are not subjected to the same daily diet of Brexit news, and perhaps their bullish approach may well be proved right by the middle of next year.”
