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News Release

London

Jones Lang LaSalle Commercial Property Auction Confirms Change in Market Sentiment


Jones Lang LaSalle’s most recent commercial property auction, held on 10th March, secured a 79% sale rate, raising a total of £39 million, a positive start to the year. This is up almost 50% on levels achieved a year ago and continues the strong resurgence in the market which started mid 2009. The average price achieved across all properties was £1.05 million, with the largest lot of the day, a Tesco store in St Albans, selling in the region of £5 million. The lowest yield of the day was 4.06% for an industrial ground rent on Middlefield Industrial Estate in Sandy, Bedfordshire, while the average yield for the whole auction was 6.24%.
 
Commenting on the auction’s result, Richard Auterac, Director and Auctioneer at Jones Lang LaSalle, said: “This is a fantastic result and we are particularly pleased with how much was raised for our clients. There was real competitive bidding in the room, with several lots selling for significantly above guide prices. The auction room witnessed a bounce-back at the end of 2009 and these results confirm the considerable depth of cash seeking property investments from discerning investors. This auction will also set a benchmark for the coming year with 20% of available properties achieving yields of 4%, a result I would have been incredulous about six months ago. Buyers are still more abundant than sellers, but with sentiment and confidence strengthening we expect an increased flow of prime stock into the auction room during 2010.”
 
Held at the Millennium Hotel in London’s West End, attendance at the auction was once again extremely high with an exceptionally wide spread of private investors present. Notable sales included:
 
  • Sainsburys store in Harrogate which sold for £685,000 against a £580,000 guide price and achieved a 4.44% yield.
  • Barclays Bank in Wroxham which sold for £758,000 against a £590,000 guide price reflecting a 4.68% yield.
  • Tesco store in St Albans which sold prior to auction in the region of £5 million, reflecting a circa 4.75% yield. The guide price was £4.3 million.
  • Ask Restaurant in Marlborough which sold for £1,477,500 against a £1.15 million guide price and achieved a 4.62% yield.
  • 44 Grays Inn Road in London’s WC1 which sold for £1.545 million against a £1.35 million guide price reflecting a 4.56% yield.
  • Office building on Norwich Business Park which sold for £890,000 against a £775,000 guide price and achieved a 6.91% yield.
Peter Cunliffe, Director and Auctioneer at Jones Lang LaSalle, concluded: “The auction room was filled with a wide range of eager cash-rich buyers looking to secure investment opportunities and achieve higher returns on their money than is currently available from the banks. Sale and leasebacks produced strong results with buyers taking stock of rental levels based on today’s values and not the euphoric levels from the peak of the market. The best Grade A stock and properties let to blue chip tenants remained the most popular lots of the day but together with realistic pricing we were able achieve fantastic results in excess of guide prices on many of the lots.”