Jones Lang LaSalle's first auction of the year, which outperformed market expectations achieving an 88% success rate, should restore some confidence in pricing and where real values lie. The auction raised £27 million, reflecting an average retail yield of 6.77%. The average size for investment lots was over £1 million, with 56% selling above this mark.
Commenting on the auction's success, Richard Auterac, Director and Auctioneer at Jones Lang LaSalle, said: "This is a fantastic result. There was real competition in the room with several lots selling for substantially above guide prices, and our remarkable result will set a high benchmark for the coming year. Vendors have become more in-touch with buyer expectations and adjusted prices accordingly, while experienced cash-rich investors, or those with access to debt, are looking to secure rewarding long-term opportunities as price falls potentially reach their end and interest rates are at their lowest-ever levels."
Held at the Cumberland Hotel in Marble Arch, attendance at the auction was once again extremely high with a wide spread of private investors present. The best prices were paid for properties let to good tenants, and of the 29 lots sold notable sales included:
Brighton Family Court, a freehold office investment let to Secretary of State with a break in seven years, sold for £3.1 million which was £600,000 above the guide price and reflects a 6.48% yield. It was previously sold in July 2008 for £3 million.
148-152 West End Lane, a ground rent investment in West Hampstead, was sold on behalf of Network Rail for £2,060,000, well above the £1.5 million guide price representing a 3.39% yield.
Tesco Express in Blackburn, which is let until 2023, sold for £1.03 million reflecting a 5.78% yield.
Peter Cunliffe, Director and Auctioneer at Jones Lang LaSalle, concluded: "There is a wall of cash that wealthy private investors are eager to invest in the property market. With returns so lacklustre in all other saving vehicles they have little choice but to find the positive returns they want in property investment. It is clear that prices for well let investments are stabilising but those for poor quality properties continue to slide".
