Hammering Home the CBRE Auction MessageWednesday 30th January 2013
Commercial Property Auction Update
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Contents
� Auction market overview – what happened in 2012?
� What’s selling well?
� What’s not selling well?
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� The Good, The Bad and The Ugly
� Predictions for 2013
� Conclusion
Size of the Commercial Auction Market
2012 £1,024,000,000
(Average lot size £221,000)
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2011 £1,077,000,000
(Average lot size £223,000)
Source: Essential Information Group
The Top 3 Auctioneers
2012 £575,748,850 raised
2011 £528,330,550 raised
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2012 78.4% success rate
2011 79.5% success rate
Source: Essential Information Group
The Top 3 Auctioneers - Lots Offered/Sold
2012 1,312 lots offered under the hammer
(17 Auctions)
2011 1,056 lots offered under the hammer
(11 Auctions)
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(11 Auctions)
2012 1,028 lots sold under Auction Contract
2011 840 lots sold under Auction Contract
Source: Essential Information Group
The Top 3 Auctioneers - Lot Size
2012 Average lot size £566,125
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2011 Average lot size £628,965
Source: Essential Information Group
The Top 3 Auctioneers - 2012 vs 2011
Properties offered
Success rates
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Amount raised
Average lot size
Sector Favourites
2011 % Sold 2012 % Sold 2012Value
Commercial Ground Rents 76.3% 88.5% (+12.2%) £9.2m
Banks 74.5% 75.2% (+0.7%) £76.9m
Retail 71.7% 71.8% (+0.1%) £343.9m
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Industrial 68.7% 68.6% (-0.1%) £130.4m
Offices 70.1% 68.1% (-2%) £103.9m
Public House 78.5% 66.1% (-12.4%) £41.7m
Leisure 64.1% 63.1% (-1%) £92.1m
Source: Essential Information Group
Average Yield (Top 3 Auctioneers)
2011 2012
Retail 8.49% 8.64%
Office 14.34% 15.51%
Industrial 11.65% 12.38%
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Leisure 9.42% 10.46%
Source: Essential Information Group
Regional Hotspots
Region Raised % Sold
North-West Home Counties £123,681,200 84.6%
London £152,615,496 82.8%
South-West £92,878,720 82.0%
East Anglia £27,210,300 75.8%
South-East Home Counties £201,946,652 75.6%
West Midlands £77,232,920 74.6%
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West Midlands £77,232,920 74.6%
Wales £41,441,361 74.0%
Yorkshire and The Humber £70,283,299 72.4%
East Midlands £67,954,550 71.6%
North-West £124,178,631 71.1%
North-East £24,734,605 70.9%
Northern Ireland £2,025,750 60.3%
Scotland £24,002,949 52.0%
What’s Selling Well?
� Defensive Properties
� Correctly priced High Yielding Asset Management Properties
� Committed Vendors
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� Committed Vendors
� Good Locations
� Smaller lot sizes
What’s Not Selling Well?
� Poor locations
� Over rented
� Weak re-letting potential
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� Weak re-letting potential
� Little or no alternative use potential
� Un-motivated vendors
The Good
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The Good
Classic Location
Guide Price £700,000/£750,000
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Sale Price £920,000 (4.9%)
186 Earl’s Court Road, London, SW5
Classic Bank Investment
Guide Price £500,000/£550,000
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Sale Price £640,000 (4.4%)
23 High Street, Teddington, Middlesex
Classic Trophy Building
Guide Price £3,600,000/£3,800,000
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Sale Price £4,310,000 (4.4%)
29/30 High Street, Windsor, Berkshire
Classic Asset Management Potential
Guide Price £1,200,000
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Sale Price £1,540,000 (6.15%)
Waterside Business Centre, Isleworth, Middlesex
Classic Alternative Use Potential
Guide Price£1,200,000 (£70 psf CV)
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Sale Price £3,760,000 (£200 psf CV)
272/276 Bath Road, Heathrow
Classic Ground Rent
Guide Price£1,000,000 +
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Sale Price £1,195,000 (4.72%)
Wedgewood Way, Pin Green Industrial Estate,
Stevenage
The Bad
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The Bad
Vacant Properties
Sold £1,260,000
34,700 sq ft
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34,700 sq ft
£36 psf CV
Tolpits Lane, Rickmansworth
Vacant Properties
Sold £705,000
46,565 sq ft
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46,565 sq ft
£15 psf CV
235 Ampthill Road, Bedford
Vacant Properties
Sold £355,000
41,870 sq ft
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41,870 sq ft
£8.50 psf CV
Northshore House, Dundee
Vacant Properties
Sold £137,500
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Sold £137,500
33 Bridge Street, Evesham
Properties let to “?” covenants
� LA Leisure Ltd (t/a LA Fitness)
� 35 years from June 2006 (no breaks)
� RPI linked rent reviews
Hove
Leeds
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� RPI linked rent reviews
� Lot sizes £650,000 - £1,700,000
� All Sold Average Yield 13.08%Lincoln
Guildford
Properties in Difficult Locations
Guide Price£2,000,000 (18.5%)
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Sale Price £2,430,000 (15.2%)
Sherborne Square Shopping Centre, Huyton,
Liverpool
“High Risk” Properties
Guide Price: £800,000/£900,000
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Sale Price £920,000 (43%) (£27.50 psf CV)
35-37 Colston Avenue, Bristol
“High Risk” Properties
Guide Price: £1,350,000/£1,400,000
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Sale Price £1,200,000 (14.96%) (£12.40 psf CV)
15 Windover Road, Huntingdon
Challenging Locations
Sold 2004 - £1,680,000 (4.95%)Sold 2006 - £1,940,000 (4.29%)
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Unsold 2012 - £820,000 (10.1%)
Sold 2013 - £790,000 (10.5%)
Oxford Street, Bolton
The Ugly
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The Ugly
Challenging Locations
Unsold £545,000
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(14%)
58/68 Channel Street, Galashiels
Challenging Locations
Unsold £675,000
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(7.2%)
Centre Court, Brookfield, Middlesbrough
Sector Issues!
Unsold £650,000
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(9.5%)
Stanley Medical Centre, Stanley, Liverpool
Mixed Issues!
Unsold £1,700,000
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(14.1%)
Olympia House, Beeston, Leeds
Mixed Issues!
Unsold £850,000
21,000 sq ft
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21,000 sq ft
(11.4% / £40 psf)
Shaw Lane Industrial Estate, Doncaster
Mixed Issues!
Unsold £1,200,000
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(19.5%)
Glydegate Square, Bradford
Increasing Risk Aversion & Polarisation
Predictions for 2013
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Polarisation
Further Valuation Adjustments for Secondary and Tertiary Stock
Predictions for 2013
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Secondary and Tertiary Stock
Lenders to be more Proactive about Property Lending
Predictions for 2013
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about Property Lending
Continuing Good Demand for Prime Properties
Predictions for 2013
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Prime Properties
Excellent Buying Opportunities for those with Knowledge & Skill
Predictions for 2013
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those with Knowledge & Skill
Conclusion
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Conclusion
Prime end of market doing well
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Increased momentum for correctly priced asset management stock
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priced asset management stock
Receivership Sales up 50% in 2012
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Receivership Sales up 50% in 2012
Private Property Company sales up 25% in 2012
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up 25% in 2012
Private Individual sales down 10% in 2012
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in 2012
30% of our buyers have never bought before at Auction
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bought before at Auction
75% of our buyers are cash buyers; 25% have funding in
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buyers; 25% have funding in place
Increasing number of long established investors returning
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established investors returning to the market
Historic Valuations are just that –HISTORIC!
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HISTORIC!
PRICING IS ABSOLUTELY KEY!
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PRICING IS ABSOLUTELY KEY!
Key CBRE Auction Dates
Auction Date
Wednesday 27th February 2013
Wednesday 22nd May 2013
Monday 8th July 2013
Deadline for Entries
Books Closed
Friday 19th April 2013
Friday 31st May 2013
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Monday 8th July 2013
Tuesday 15th October 2013
Wednesday 4th December 2013
Friday 31st May 2013
Friday 13th September 2013
Friday 1st November 2013