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News Release

London

A Blossoming Result for Jones Lang LaSalle’s Spring Auction

73% Sale Rate for Jones Lang LaSalle’s 2nd commercial property auction of the year


London, 22nd May 2009 – Jones Lang LaSalle’s second commercial property auction of the year, held on 20th May, achieved a very encouraging 73% sale rate on the day and highlighted the rising demand of private investors for superior quality properties let to first rate tenants. The auction raised £40 million reflecting an average yield across all property types of 7.97%, a huge result in a market where product is simply not available. The average size for investment lots was over £1.05 million, with 30% selling above this mark.

Commenting on the auction’s success, Richard Auterac, Director and Auctioneer at Jones Lang LaSalle, said: “There was a great atmosphere in the auction room yesterday; you could tell that investors appreciated the real buying opportunities present from the breadth of the bidding, especially for the finest retail assets. Cash returns on savings are still pitiful against the potential returns on property, and those who are not saddled with debt were rightly tempted into the auction room and to spend. Over the coming months we are going to face a dearth of these sought after properties and this will have an upward push on prices. However, a two tier market has emerged since the start of the year and though experienced and liquid investors are out in force and eager to snap up well priced quality lots, secondary assets are still waiting for their bouce back.”

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. Notable sales included:

- A Kwik Fit in Sevenoaks sold for £667,500 reflecting a yield of 4.68%.
- An industrial unit in Droitwich, which is let to Securicor until 2073, sold for £690,000 against a £550,000 guide price reflecting a 5.21% yield.
- A shop on High Street in Guildford occupied by Nokia achieved the lowest retail yield of 4.85% when it sold for £1.365m.
- 18 Union Street in Bath, which is currently let to retailer Tie Rack obtained a 5.49% yield selling for £1.31 million.
- The Cheltenham & Gloucester in Newport on the Isle of Wight, which also included an office above the premises, sold for just over £1 million reflecting a 6.25% yield.
- The Bunzl unit on Isis Industrial Estate in Manchester sold for £3.1million.

Peter Cunliffe, Director and Auctioneer at Jones Lang LaSalle, concluded: “Some of the most experienced and savvy private investors were back buying in the auction room yesterday, demonstrating the clear positive shift in attitudes towards commercial property investment. This is reflected by the amount we raised and the prime yields achieved. More than ever, the length of a lease, covenant strength and rental growth are crucial to secure competition for assets and have pushed prices off their bottom. In some cases the price reduction over the last 18 months has been made up. While the debt market remains frozen, cash investors are starting to find some of the best bargains in the auction marketplace for a decade for the more secondary assets.”