Post-Brexit bounce as Allsop's London auction sees sales of Stg£117m
While speculation has abounded in relation to the potential uplift Dublin and Ireland's other main cities might experience as a result of Brexit, little enough has been said or written on this side of the Irish Sea about the Brexit 'bounce' being experienced in the UK.
That bounce was clearly in evidence last Monday at Allsop's latest commercial auction at the Berkeley Hotel in London with a jaw-dropping Stg£117m plus in sales taking place in the space of one afternoon. Demand at the auction, Allsop's most successful single sale since 2006, came from private investors not requiring finance.
Given that the vast majority of buyers on the day were UK based, the current weakness of Sterling is not being seen as the principal driver behind the transactions.
One industry observer believes that notwithstanding investors' ongoing concerns over Brexit, the prevailing low-interest rate environment continues to fuel investment in the commercial property sector.
The highest value lot sold in the room last Monday was an unbroken parade comprising 12 shops, 19 flats and an office in London, SE13, which sold for Stg£6m. Other notable lots included a prominent corner building in Hove comprising two shops and seven flats which sold for Stg£1.82m. Elsehwere, a retail parade in Stockton comprising nine shops and a convenience store let on an overriding lease to Co-operative Foodstores Ltd, sold for Stg£1.73m, while a pub and two flats in Hayes let on an overriding lease with privity from JD Wetherspoon until 2032 sold for Stg£1.045m.
Commenting on the auction results, Duncan Moir, Partner and Auctioneer at Allsop in London said: "We anticipated a solid result from our first sale of the autumn season despite the prevailing economic uncertainty, but the strong showing from private investors exceeded all expectations. It was standing room only, with an estimated attendance of over 500 people throughout the day, and the demand was clearly evident from the start."
Where it might be difficult for investors to predict long-term growth beyond inflationary growth, it would appear that the potential for rental income may have provided buyers with the necessary impetus.
Some investors may also have been factoring the potential for post-Brexit capital growth into their bidding.
That explanation would seem to be supported by the fact that the average premium over reserve price rose from the normal 12pc to 20pc last Monday.