Real estate, alternative real assets and other diversions

Auction Watch July Auction revenues dropped 24%, from £267m in June 2017 to £203m in June 2018

The Auctioneer

The market experienced a notably challenging month, with overall lots offered down 19.5% to 2,144 lots and lots sold down 23.1% to 1,498 lots. Auction revenues dropped 24%, from £267m in June 2017 to £203m in June 2018.

Whilst the numbers are certainly alarming they are perhaps reflective of the challenging market conditions and economic backdrop that we find ourselves in. Growing speculation of an impending interest rate rise, Brexit uncertainty and ongoing high-street woes are all factors that are affecting confidence amongst buyers and sellers alike.

Recent reports suggest that it isn’t just the auction market feeling the strain – there is simply a decreasing numbers of private treaty buyers, causing a slowdown in sales and putting downward pressure on prices.

On 3rd July, Allsop held a commercial auction in London where there was a very rare break up of a large portfolio of HSBC banks. A charitable foundation raised almost £19m from the sale. It had bought the sale and leaseback portfolio from the bank in 2008 and all were let to HSBC until 2023.

Around half the 25 properties were regional branches, which sold well to raise just over £9m. The remainder were in London and the South East, raising £9.7m. A branch in Bexhill-on-Sea, East Sussex beat its £600,000 reserve to raise £760,000 reflecting a 6.92% whilst one in Clevedon, Somerset beat its £300,000 reserve to fetch £365,000, reflecting a yield of 8.29%.

Auctioneer Duncan Moir said the successful sale of all 25 lots offered by the client demonstrated the benefits of breaking up a “granular portfolio” to achieve better prices for the individual assets.

The Allsop auction raised £80m from 127 lots, reflecting a 71% success rate.

At Lambert Smith Hampton’s London auction on 9th July, receivership lots, surplus banks and local government stock found eager buyers. Refurbished mixed-use high street shops and vacant shops though really struggled to sell.

The auction raised £4.67m in total, but only achieved a 62% success rate. The firm typically reports 80%+ success rates, and this was there lowest figure since 2011.

Head of auctions at LSH, Oliver Childs, put a brave face on it stating ”the success rate was lower than we are currently used to, but the room was busy and telephone bids were at their normal level”.

Three former NatWest bank branches performed very well. A branch in Henfield, West Sussex sold for £290,000 against a guide of £225,000; one in Benfleet, Essex sold for £505,000, against a £450,000 guide; and one in Canvey Island, Essex sold for £290,000 against a £200,000 guide.

The Auctioneer

About Auction Watch

Auction Watch is a regular feature looking at the preceding month's auction activity, based on data from David Sandeman of the Essential Information Group.

Articles by Auction Watch

Our Partners