Total Realisation - £51.7m
90% of lots offered sold
Average Retail Yield - 6.7% (8.3% December 08)
Average Lot Size - £950,000 (£580,000 December 08)
Largest Lot - Lot 27 Bradford £4,740,000
The first commercial auction of 2009 took place on Wednesday 11th February in a packed room and concluded with a remarkable 90% success rate, a very encouraging start to the New Year. As reported following our December auction, there remains a strong appetite for property which, when correctly priced, stimulates competitive bidding. This auction, on average, generated sale prices some 15% above reserves.
As expected, with interest rates at such low levels the cash rich investor is turning to property to take advantage of higher returns. Good quality lots sold particularly well, leading to a hardening in the average retail yield from 8.3% in December to 6.7%. 10 lots achieved yields below 6%.
There was a wide range of private buyers at the auction, including a strong overseas contingent. Interestingly, we also saw a number of 'old faces' returning to the auction room, seeking to take advantage of market conditions.
Successful vendors included British Land (who sold 6 lots raising £14.015m), PRUPIM and ING Real Estate Investment Management, as well as a leading pub operating company who offered and sold a portfolio of 8 retail and leisure investments raising £3.177m.
Highlights included:
· Lot 5 Ripon, let to Edinburgh Woollen Mill sold for £885,000, 6.2% net initial yield, off a guide of £725,000
· Lot 6 Soho, let to Spirit Managed Pubs sold for £2,220,000, 5.8% net initial yield, off a guide of £1,800,000
· Three properties let to HSBC Bank were sold prior to the auction, achieving strong prices with net initial yields down to 6.1%.
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