Last week, Allsop Residential had its best September auction ever, helped by the sale of a number of offices with permission for conversion into apartments under permitted development rights (PDR).
The auction house sold 163 lots - 80% of the 203 offered - raising a record £71.3m.
At the equivalent auction in September 2016, Allsop raised £58.9m from the sale of 155 of the 194 lots offered, which also achieved an 80% success rate.
An office with PDR for conversion into 17 flats in Kingsbury, north London, was the star lot of the day. It was guided at £2.5m but eventually sold for more than £700,000 above that price, at £3.2m - reflecting a 6.58% yield. The site spans 9,633 sq ft and is part vacant.
Another lot that far exceeded its guide price was a cluster of buildings comprising a 22,572 sq ft office and seven warehouses in Bedfordshire (above), which have permission for conversion into 39 apartments. Guided at £1.75m, the lot ended up selling for £2.9m.
“Permitted development has been a very active area for us,” said Allsop partner and auctioneer Gary Murphy. “Our buyer base has been extremely receptive to office-to-residential opportunities.”
He added that Allsop expected to be offering a “broader choice” of PDR opportunities in the future because of the recent extension of PDR to the light industrial sector.
The lot that surpassed its guide price the most was a three-storey building arranged as 24 one-bedroom flats in Worthing, West Sussex. The property, on a site covering 0.3 acres, more than doubled its guide price of £1.1m, selling for £2.4m.
“Despite all that’s been thrown in the path of buyers over the past year, the market is anything but inactive,” Murphy said. “We’re experiencing some very healthy competition in our rooms and it’s encouraging to see that bidders are not shy of the higher-value lots. At each successive Allsop sale, the multi-million-pound stock is emerging as the biggest crowd-puller.
“As ever, our challenge is to match reserves to buyer sentiment. But get that right and the sky’s the limit.”
Allsop’s next residential auction will be held on 26 October at the Cumberland Hotel in London.
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