Residential property

BUZZ RETURNS WORDS: NILESH RAJ PATEL, PRINCIPAL, PRIDEVIEW GROUP to commercial real estate

PRICE: £605K GROSS YIELD: 6.6%

After a difficult 2019 that will be remembered for colossal uncertainty and division, suddenly the UK has become an oasis of calm. This is thanks to the unbelievable twist to the Brexit plot - the Conservative government landing their largest majority since 1987.

Meanwhile uncertainty prevails across many parts of the world, such as China, Australia and the Middle East. In changing times like these, Real Estate is where wealth is stored and preserved, and with the UK back on the map, we are seeing renewed interest in commercial property both from UK residents and overseas buyers.Many investors, armed with their 2020 resolutions, flocked to the first auction of the year held by Allsops, where it was reassuring to feel the buzz of competitive bidding return to the auction market after a quiet 2019. BUXTONI Long leasehold convenience store let for 15 years (no breaks) DESCRIPTION: ca. 4,000 sq.ft. unit with parking let on a 15 year lease LOCATION: Town-centre location

PRICE: ca. £2.4M GROSS YIELD: ca. 17%

HASSLE-FREE INCOME We sold two McColl’s convenience store investments in this auction with 15 years term certain. The first included a flat and was well-located in a mixeduse ward of Watford, and sold prior to auction for over £900,000 (5.5% gross), whilst the second included a Post Office and Subway and occupied a town-centre location in Buxton, the Peak District Spa town, and sold in the room for £605,000 (6.6%). Interestingly, the buyer of Buxton had come to bid on Watford, but as it had sold prior he thought that it was better to go 150 miles north to Buxton, where he got the same 15 years of income and same quality tenant, just at a better yield.

When it comes to long-term wealth preservation and income generation, it’s clear that not all classes of commercial property are equal, especially as we continue to adapt to the rise of e-commerce. But local convenience stores remain a staple product and it’s no coincidence that in 2019 we did over 40 deals in this subsector.

HIGH-YIELD INVESTMENTS That said, what attracts so many buyers to UK commercial real estate is the variety of needs it can satisfy. Whilst many nay-sayers continue to mourn the “Death of Retail”, our more opportunistic buyers are cashing in on the high yields on offer. We acted for an East Asian investor (who came to us via an Introducer) on the purchase of an unbroken retail parade in Ashtonunder-Lyne, a market town 6 miles east of Manchester, for ca. £2.4m (17% gross). The parade has 10 different tenants including a McDonald’s and many of the rents have been rebased. This is a fantastic example of how UK bricks and mortar remains a globally attractive commodity, especially when it can offer a healthy income. In 2019 we did almost 100 deals in every region of the UK for a range of private investors with requirements ranging from hassle-free income to proper asset management. So if you or your clients have resolved to cut loose in 2020, give us a call.

ASHTONI Freehold detached parade comprising 8 retail units with offices and ancillary above DESCRIPTION: ca. 30,000 sq.ft. multi-let building comprising 8 retail units with offices and ancillary above LOCATION: Pedestrianised town-centre location adjacent to the market

Our expert

IF YOU ARE LOOKING FOR A COMMERCIAL PROPERTY INVESTMENT IN 2020 VIA AUCTION OR PRIVATELY, DO CONTACT ME ON NILESH@ PRIDEVIEWGROUP.COM OR 0208 954 0878. WE HAVE A NUMBER OF OFF-MARKET INVESTMENTS AVAILABLE NOW, AND WILL BE ACTIVELY BUYING AND SELLING IN THE UPCOMING AUCTIONS.