1st Quarter 2023

Quarter 1 2023

During the first couple of months of the year it felt like the entire industry was waiting for the spring Budget.

Would residential or commercial buyers be offered incentives to jump-start the market?

Discounted Stamp Duty, deposit guarantees or a Help to Buy replacement, perhaps? In short, no. There was nothing in the Budget for the property industry; zilch, zero.

In time that might be a good thing though. We’ve been spoilt in recent years; maybe to the point that the market had grown a little arrogant. Record-low interest rates, SDLT holidays and other treats have driven the private market through Brexit & Covid, whilst Help To Sell has been propping up the new homes sector since its inception.

So where does that leave us? Well, most prospective home-buyers have proportionately more savings now than they did 15 years ago, and five-year mortgage debt is below 4% – notably lower than it was before the banking crisis. Those two factors will ensure that the private resi market keeps moving.

In the new homes sector, developers need to get real. Help To Sell gave housebuilders access to buyers that wouldn’t otherwise have been able to afford a new home. Those days have gone, so prices must be adjusted to tempt buyers away from the second-hand market. Convenience is an increasing driver for the UK population, as is the cost of living. Couple that with the hassle of home improvements and it shouldn’t be difficult to instil the virtues of a brand new, fully-fitted, energyefficient home to the purchasing public; and levy a small premium in the process.

On the professional side of the industry, margins continue to be squeezed by rising taxes, interest rates, utility, labour and material costs. Land values and investment yields are being adjusted accordingly, and buyers expect to see value in any deal. As a result, we’re unashamedly focusing on motivated sellers and landlords.

Now isn’t the moment for over-listing, but if you have a development site, commercial property or

investment that you’re keen to sell or let, please get in touch. Achieving top money is no longer a foregone conclusion, but we continue to secure premiums for the best, and most sought-after properties.

In Acorn news we’re currently refurbishing our London offices, and are looking forward to moving back in during April. We’ll be sharing the space with Boyer Planning Consultants – another Leaders Romans Group company. We’ve worked with Boyer since long before the LRG takeover, and there’s an obvious synergy between the teams. A more diverse service offering will be available to clients of both businesses, and the Acorn Commercial Darts Team will, at last, have regular competition!

This Update reports on a selection of the deals completed by Acorn’s Commercial & Development Division during the first quarter of 2023. As always the properties are varied in their location, nature, size and price-point, and therefore illustrate the diversity of our operation. I trust it proves an interesting read.

Jeff East — Director Jeff.east@acorngroup.co.uk

London Office

120 Bermondsey Street, London Bridge, London SE1 3TX 020 7089 6555

Bromley Office

9 St Mark’s Road, Bromley, Kent BR2 9HG 020 8315 5454

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In a nutshell

Beckenham BR3

Freehold investment comprising vehicle showroom and workshop underlet at £36,000pa until September 2024, with ground rent income from 4 upper flats. Sold for £540,000 reflecting a NIY of 6.4% and low capital value.

Bromley BR2

The last week of March was manic, with several larger deals concluded before the end of the tax year and the onset of the Easter holidays.

One such transaction saw Clarion’s former Bromley HQ sold to Rehoboth Property International. We were instructed jointly with Kalmar’s to market the property; the client’s brief being to conclude an unconditional sale before their year end.

Bermondsey SE1

Smart ground floor office suite in a mews just off Bermondsey Street. Approx 1,000sqft and arranged with 12 desks and a meeting room; we concluded a letting at £35,000pax.

Comprising more than 57,000 sqft of vacant offices across two buildings and a 1.3-acre site, interest was forthcoming from investors, developers, educational, healthcare and leisure operators. Ultimately Bromley’s Article 4 directive that seeks to protect office accommodation proved a decisive factor, and the best offers came from office occupiers and providers.

RPI operate a smart office hub in the former Dartford Police Station and plan a similar offering from Bromley South. They were granted just 4 weeks of exclusivity at the end of February and completed their acquisition with time to spare.

Thank you to Clarion Housing Group for the business and to our friends at Kalmar’s for their effective cooperation throughout.

Bromley BR1

Having sold this warehouse to an investor a decade or so ago, we’ve since let it a couple of times. We recently completed the circle by selling the freehold interest to the current tenant.

A rather unusual development opportunity in that the ‘donor’ property; a working men’s club was only built in 2016.

Our clients acquired the property as an investment and secured planning permission to extend and convert the building to provide a day nursery and 4 residential apartments. Whilst development sites continue to prove popular, in our opinion the consent didn’t necessarily add to the existing use value. Our logic is that standalone buildings with E or F class use are highly sought-after by faith and educational groups, and the value to such a buyer could negate the development angle entirely.

The property proved popular in the market with offers received for a variety of uses. Ultimately the existing F-class use prevailed, with the property sold to a local faction of an international faith group.

In a nutshell

Chelsea SW6

Brockley SE4

With planning proving increasingly challenging and rising land taxes clobbering any successful application, redevelopment isn’t necessarily the obvious option nowadays. Larger residential properties are also popular with surgery and private educational operators, and as a result of lockdown, families are willing to invest more heavily in their main residence.

With the above in mind, we regularly market certain properties alongside our 40-branch residential network to ensure we have every angle covered. That approach paid dividends recently as despite interest from several developers and a day nursery, this detached house in the Brockley Conservation Area was ultimately sold to owner-occupiers.

Ilford IG3

Lewisham SE13

Redundant, narrow plot sold on the instructions of Goodmayes Methodist Church with full planning permission for two 2 bedroom apartments. We achieved £250,000 for the vacant freehold interest.

Attractive development plot in the sought-after Belmont Hill Conservation Area. Offered with full planning permission for a contemporary 3 bedroom house, the site sold for £325,000.

Freehold investment comprising vacant lock-up shop c.900sqft with E-use class, and ground rent income from an upper maisonette. Lots of interest drove the ultimate sale price to £338,000.

Bermondsey SE1

Anyone familiar with Southwark will have noticed this site over the years. The redundant secondary parade sits on the corner of Grange Road and The Grange. Its shuttering is adorned with graffiti, and the flank served as a canvas for Banksy’s ‘HaringDog’ mural from 2010-2016.

Most recently used as a car wash, planning permission was granted for a seven-storey mixeduse building back in 2015. The site was sold without the S106 Agreement being completed, and therefore the scheme never came forward.

Our London office is within walking distance, and we’ve monitored the site waiting for an opportunity to introduce a buyer. In 2022 the Russian-backed owners decided that a sale would be prudent, and we introduced a retained client with a strong track record for straightforward, unconditional transactions.

Completion of the sale took place in February 2023, at which point the buyer made a planning application for 22 flats and 3 commercial units in a building that will rise from 4-7 storeys.

Erith DA8

The role of a good agent is to add value. Typically that occurs during the sale or letting of a particular property, but we have other ways too.

BexleyCo, the development arm of Bexley Council, acquired this site and secured consent for 30 flats in a new five-storey block. The intention was always to develop the scheme but having been let down by a contractor, BexleyCo contacted us for advice.

Selling the site was an option, but instead, we introduced Skillcrown Homes – a firm with a long and successful track record contracting for Registered Providers, Local Authorities and similar organisations.

A build contract was agreed between BexleyCo and Skillcrown that will see the 30 units built for private sale. The contract was signed at the end of March, with construction due to commence in Q2 2023.

CGI

Croydon CR0

This consented development site was recently sold for historic clients. Comprising a vacant house with large plot to the side, the planning permission provides for extension and conversion of the existing building, and construction of a new block in the grounds. A total of 9 flats will be developed with a GDV of c.£3.3M. We retain a huge database of buyers for opportunities of this nature and were able to

quickly generate interest at a competitive level. The property was ultimately sold to a private developer for £1,050,000. Consented development sites will always be our bread and butter, and we’re constantly seeking new instructions. We’ll look at anything from 1-1,000 units, so if you have a development site to sell please get in touch.

Bromley BR1

After successfully letting a commercial unit in this town centre building in late 2022, we were subsequently instructed by the overseas owners to sell the investment.

Comprising two shops and two fully refurbished flats, the property produces a total rent roll of £78,400. We invited offers in the region of £1.2M for the building; reflecting a NIY of 6.2%.

Whilst commercial debt is seemingly harder to come by and undoubtedly more expensive, our role is to make the market, not follow it! Bromley remains a busy market town and the capital of London’s largest borough. With that in mind, there’ll always be a buyer for a mixed-use investment at 6%+.

Early interest led to a solid offer from an investor with funds to deploy before a facility expired. With time very much of the essence, contracts were exchanged and completed in less than a month!

In a nutshell

New Eltham SE9

Highly visible showroom and forecourt premises at the ‘Fiveways’ junction on the A20. Showroom c.1,000sqft with parking for c.30 vehicles – let to a van hire business for £40,000pax.

Croydon CR0

The long-term owners of this industrial property had closed their business, and agreed a sale to a developer via another agent.

As doubts about the sale grew we were contacted for advice and were confident of replacing the buyer based on the existing use value alone.

When the sale fell through we took over the marketing, and had interest from owner-occupiers and investors. A deal was agreed with local buyers who acquired the vacant freehold interest via a SSAS, and completed within 6 weeks of their offer being accepted. The new owners intend to occupy the office element and sub-let the storage space and yard.

Similar freehold commercial properties are always required; with or without vacant possession.

Camberwell SE5

The final commercial letting at Hyde’s Wing Of Camberwell development saw King’s College Hospital take another c.4,000sqft at £78,480pax. This adds to 3,000sqft that we let to them last year.

Catford SE6

An interesting investment sold on behalf of a private client who’d inherited the property from a generous family friend.

Comprising an end terrace house split into two flats, a detached period cottage and a rear garage block, the property was offered for sale as a whole subject to two ASTs. Offering various active management angles and possible development potential (stpp), our instructions were to secure a prompt, unconditional sale.

Welling DA16

Prominent shell unit close to Welling Station let to a day nursery operator with several other sites locally. Approx. 2,440sqft with E-class use let at £40,000pax.

Early marketing generated more interest than even we expected, and resulted in several cash offers.

A sale was agreed with a professional investor, and the matter was completed a little over a month later.

We relish the challenge that unusual properties present, so if you have a similar asset to sell please contact one of our offices.

Meet the Team

Daniel Dennis Commercial & Development Agency

Rosie Davis Senior Team Assistant

Adam Miles Commercial & Development Agency

Blaise Ribbons Team Assistant

Jamie Stevenson Commercial & Development Agency

Louis Markham Commercial & Investment Agency

Finn Robertson Commercial & Development Agency

Rishil Patel Commercial & Development Agency

Tom Luck Director

Jeff East Director

Steven Flannighan Commercial & Development Agency

Callum Reeves Commercial & Development Agency