Acuitus held their second auction of the year on the 28th March, and nearly a third of the lots sold. According to Acuitus’ report, the auction achieved yields of 6% or lower as investors continued to target high quality assets. The sale raised £33.5m from the sale of 49 lots with 10 properties selling for more than £1m.
Acuitus auctioneer, Richard Auterac, commented: “There was much more positivity in the room than at the first sale of the year when investors were still feeling their way into the new year and adjusting to the political environment.”
Here we have summed up prominent commercial properties from the Acuitus Auction, which also includes Blue Alpine’s proprietary scoring guide.
At Blue Alpine, we consider many aspects of a property before investing. Therefore, we have created a proprietary scoring system for property investment opportunities. The total score possible for any property is 40 points. Please find below the score ranges and their respective buying signal.
Lot #: 1
Town: Salisbury
Address: 69 Netherhampton Road, Salisbury, Wiltshire, SP2 8NA
Investment Opportunity: Convenience Store Investment
Tenant: One Stop Stores Limited
Blue Alpine’s Pre-Auction Snapshot of Property:
Blue Alpine’s Proprietary Scoring: Post-Auction
Blue Alpine’s After Auction Review (AAR):
Sold Price: £511,000
Yield: 4.67%
This property is entirely let to One Stop Stores Limited (a part of Tesco Plc) and comprising of a convenience store with forecourt parking and one bedroom flat with separate entrance.
With a pre-auction yield of 6.25%, and when the hammer dropped the yield was 4.67%. The property sold £111,000 more than the Guide price. Given the covenant strength of the tenant, this is not surprising.
Blue Alpine’s Proprietary scoring for the property only dropped by 1 point to 27 out of 40 points compared to the pre-auction score of 28 points. Therefore, the property remains a neutral buy.
Lot #: 2
Town: London
Address: 497 Kingsbury Road, London, NW9 9ED
Investment Opportunity: Retail and Residential Investment
Tenant: Yum III (Ltd) t/a Pizza Hut
Blue Alpine’s Pre-Auction Snapshot of Property:
Blue Alpine’s Proprietary Scoring: Post-Auction
Blue Alpine’s After Auction Review (AAR)
Sold Price: £675,000
Yield: 3.27%
The property is let to Yum III (Ltd) t/a Pizza Hut until 2023 with a tenant option to renew until 2033, so there is a strong covenant. The nearby occupiers include Boots, HSBC, Costa Coffee, Aldi and Barclays.
With a pre-auction yield of 4.22%, and when the hammer dropped the yield was 3.27%. The property sold £125,000 more than the Guide price.
Blue Alpine’s Proprietary scoring for the property dropped by 1 point to 28 out of 40 points compared to the pre-auction score of 29 points. The pre-auction score of 29 points indicated a buy signal according to Blue Alpine’s Proprietary scoring system. Looking at our scoring system post-auction, we see that the signal is now neutral.
Although the yield is lower than we would like to see for this type of investment, the liquidity of this property investment is strong and an opportunity for capital appreciation.
Lot #: 5
Town: Rushden
Address: 27 / 29 High Street, Rushden, Northamptonshire, NN10 0QE
Investment Opportunity: Retail Investment
Tenant: Boots UK Limited
Blue Alpine’s Pre-Auction Snapshot of Property:
Blue Alpine’s Proprietary Scoring: Post-Auction
Blue Alpine’s After Auction Review (AAR)
Sold Price: £700,000
Yield: 6.38%
This property is situated on the western side of High Street and is let to Boots UK Limited until 2023 with no breaks. There’s also a fixed 1.5% annual rental increase rising over time to £49,910.79 in 2022. The nearby occupiers include Peacocks, Lloyds Bank, WH Smith and Argos.
With a pre-auction yield of 8.55%, and when the hammer dropped the yield was 6.38%. The property sold £150,000 more than the Guide price. With a healthy yield and strong covenant, we are not surprised this property sold for £150,000 more than the Guide price.
Blue Alpine’s Proprietary scoring for the property stayed the same for pre-auction and post-auction with a score of 27 out of 40 points, therefore the signal remains neutral.
Lot #: 45
Town: Toddington
Address: 2 and 4 High Street and 42 Market Square, Toddington, Bedfordshire, LU5 6BY
Investment Opportunity: Retail Investment
Tenant: Sublet to local estate agent on the ground floor and two separate tattoo studios on the upper floors
Blue Alpine’s Pre-Auction Snapshot of Property:
Blue Alpine’s Proprietary Scoring: Post-Auction
Blue Alpine’s After Auction Review (AAR)
Sold Price: £330,000
Yield: 6.36%
This property is sublet to a local estate agent on the ground floor and two separate tattoo studios on the upper floors, therefore the strength of covenant is not as strong as letting to larger companies.
With a pre-auction yield of 9.33%, and when the hammer dropped the yield was 6.36%. The property sold £105,000 more than the Guide price.
Blue Alpine’s Proprietary scoring for the property dropped by 1 point to 22 out of 40 points compared to the pre-auction score of 23 points. Therefore, the property remains a neutral buy. However, with a score of 22 out of 40 points, we consider this a low neutral scoring and borderline weak signal.
Disclaimer: All views expressed in this article are Blue Alpine’s and do not represent the opinions of any other agency, organisation, employer or company whatsoever. Assumptions made in the analysis are not reflective of the position of any entity other than Blue Alpine’s – and, since we are critically-thinking human beings, these views are always subject to change, revision, and rethinking at any time. Please do not hold us to them in perpetuity.
The authors and Blue Alpine are not to be held responsible for misuse, reuse, recycled and cited and/or uncited copies of content within this article by others.
Blue Alpine – Who We Are: the boutique giant deal maker
We’re at the forefront of UK commercial and residential property investment.
In an ever-changing property landscape, tomorrow’s real estate is today’s investments. Our unique consultative approach means we gather a thorough understanding of what our investor’s key financial goals are.
Simply put, we offer a range of investment opportunities for those looking to gain access to well-researched property transactions that offer fruitful risk-adjusted returns. We structure all our transactions so that you enjoy significant capital gains either through development or property acquisition.
Our investment approval procedure is a guarantee that all potential investments are subject to heavy due diligence so that we minimise and mitigate your risk while attaining the best returns.
Contact Details:
Prash Jaitley – Managing Partner
M: +44(0)79618 53166
E: prash@bluealpine.com
Joseph Bachman – Investor Relations
M: +44(0)77236 19270
E: joseph@bluealpine.com
