Sep 25

London love affair continues for auction investors

At commercial property auctions, London is still a magic sign for many investors. 

Blog_Banner-02Having been cut off from millions of tourists and commuters during successive lockdowns, the capital may have suffered disproportionately during the pandemic but its property markets are now coming back strongly. 

BNP Paribas has recently reported that retail-led investments in London are set to exceed £1bn this year with around £75m-£100m of investment allocated towards Oxford Street opportunities alone.

At Acuitus auction sales, we’ve seen a growing proportion of investors put their faith in London. In the second quarter of this year, 31% of the properties sold by value in Q2 were located in the capital. This is a 50% increase on the long-term average of 20%.

On closer inspection of the data, it’s clear that retail assets with a residential component are particularly popular with investors. They are attracted by the diverse income streams along with potential for active asset management and development opportunities.

Recent examples of these include:

  • A five-storey terraced building at 295 New Kings Road comprising a restaurant and six-bed maisonette with refurbishment potential sold for £1.566m at a yield of 4.45%

  • A retail and residential asset on Mitcham Road, Tooting with two vacant flats on the upper levels sold for £975,000 at a yield of 3.69%

  • A five-storey terraced property comprising a restaurant and four-bed apartment on Old Brompton Road sold for £1.706m at a yield of 3.73%

The capital has long been heralded for its economic resilience in times of an economic downturn. What we’re are seeing through the auction room is a renewed confidence in the investor market for London-based assets where fluctuations in price and income are smaller and investment is more secure over the long term.

These positive signs come at a time when commercial property auction sales have been radically ‘democratised’ by a move to online auctions which give access to anyone, anywhere.

Although many of us miss the lively ‘talking shop’ that gathering for a in-person sale created, the pandemic fostered a positive change in investors’ attitude to using technology for the purposes of acquiring property.

Our online sales now put a far wider range of investors both locally and nationally in touch with investment opportunities. This is manifesting itself by the increased depth of interest from buyers who live locally to the assets on which they are bidding. Instead of having to travel to London or wherever to attend an auction, buyers can now secure an income-producing asset without leaving their desk.

Richard Auterac is Chairman of Acuitus Auctions


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