Jones Lang LaSalle Auction Signals Change in Market Sentiment

Commenting on the auction, Richard Auterac, Director and Auctioneer at Jones Lang LaSalle, said: “This is a good result and we are particularly pleased with how much was raised for our clients. The competition for the best Grade A stock and for properties let on long leases to blue chip tenants continues in earnest, but this end of the market is still plagued by a lack of supply. However the overflow into more secondary properties of cash unable to find a home in prime stock appears to have slowed since the October round of auctions as investors remain cautious about the occupier market.”

Held at the Cumberland Hotel in London’s Marble Arch, attendance at the auction was once again extremely high with an exceptionally wide spread of private investors present. Notable sales included:

* Premier Inn Hotel and Restaurant, Newcastle Road in South Shields sold for £3.895 million reflecting a 6.56% yield.
* 204 Shaftesbury Avenue in London sold for £733,000 and achieved a 4.52% yield.
* The Tesco Express at 452-454 Hackney Road in London achieved a 5.51% yield. The property sold for £1.245 million.

Peter Cunliffe, Director and Auctioneer at Jones Lang LaSalle, concluded: “There is still a wall of cash in the marketplace but investors are demonstrating caution in their decisions when buying secondary stock. Commercial property still promises more attractive returns that other asset classes, but investors are choosing to take stock of where real value lies. They seem to be willing to wait a little while in order to establish clarity regarding the occupier market and how occupiers are reacting to developments in the wider economy.”

source : Jones Lang La Salle