1ST QUARTER 2020
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Mixed-use freehold site sold on behalf of a private family trust…
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Development site sold in the popular suburb of South Croydon…
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Unbroken freehold block sold for Hyde Housing Association…
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Retail space in secondary parades proving popular...
EDITORIAL Jeff East — Director
jeff.east@acorngroup.co.uk Summarising the first quarter of 2020 is a surreal task, and above all, I hope that anyone reading this has been fortunate enough to keep themselves and their families safe and well during the horrific pandemic that the world is currently experiencing. Clearly business will always be important, but for the majority of us it currently sits several places down the list of priorities behind keeping our families healthy, fed and sheltered. We’re the fortunate ones too – first world society is clearly much better placed to deal with the current situation, and in the UK we have the benefit of an excellent National Health Service to fall back on if needed. Others, elsewhere, are nowhere near as lucky. Turning briefly to business, with the General Election out of the way in the second week of December, we immediately saw a drastic upturn in business across our entire Group. Brexit was an inevitability by that point, and therefore had no impact at all on business during the early year. Our residential sales numbers were up 45% year on year
in January, and 46% YOY in February. Similar increases were experienced by our New Homes Division, and indeed the Commercial & Development Division. It’s by no means an exaggeration to say that at the end of February, we were flying. What a difference a few weeks make though. By mid-March sales figures weren’t even a consideration, let alone priority, and in line with Government protocol we temporarily closed all 38 of our offices to the public. We moved quickly as soon as the Job Retention Scheme was announced, and like most businesses, a large proportion of our staff are currently furloughed. Our Property Management and Estate Management teams are still working full time remotely, and with more people spending more time at home, we’re as busy as ever. In the Commercial & Development Division, so much of what we do requires travel and access to properties; none of which is presently deemed ‘essential’. With that in mind we have a small team handling enquiries for ongoing instructions from home. We aren’t undertaking any physical viewings at all, but are in the process of preparing virtual and video tours of many of our current instructions. We have purposely not undertaken any proactive marketing since the lockdown was imposed, but will begin to bring a limited number of properties to the market in early May. These are properties that were inspected before the lockdown, and that we now believe can be marketed
without the need for any personal contact or unnecessary travel. We are of course continuing to progress ongoing files, and have agreed an encouraging number of new deals across all sectors in recent weeks. Freedom to travel is all that is preventing us from being fully operational. Whilst the lockdown remains in place though we are ensuring that our staff can follow Government guidance to the letter, and we encourage our friends, clients and professional contacts to do likewise. In closing, as the lockdown continues I’ve increasingly begun to think what sort of lasting legacy Coronavirus might leave on UK society. Even when we are able, will the public socialise, spend and travel on the scale we did previously? Will we greater appreciate the simple pleasures of home and family, and will more personal money be allocated for rainy days rather than the material items that right now are seemingly worthless? Work practices too are certain to change. Some businesses already had very efficient remote-working strategies in place; but many of us didn’t. Now that we do, how many of us will go back to 50+ hour, office-based working weeks? I can’t possibly dream of predicting what business might look like in the coming months. It will recover though, and I’m confident that when we’re allowed to do so, the working population will pull together to make it happen sooner rather than later. Meanwhile, I wish you, your families, friends and colleagues well.
DULWICH SE22 We concluded a very quick sale of this prominent, unbroken freehold block on behalf of Hyde Housing Association in early 2020.
The existing building sits on a large corner plot in the popular suburb of East Dulwich, and was built as 8 one bedroom assisted living apartments with C2 use. With the potential to generate short-term income and a positive pre-application response for a 16 unit scheme, we had every confidence that a strong price could be achieved on an unconditional basis. Having been instructed in mid-December we prepared particulars and had a for sale board installed at the property. Our intention was to defer active marketing until the New Year, but interest from the board alone was so strong that several offers were soon received. One locally based firm had cash on the hip from a recent completion, and were determined to secure the property. Their unconditional offer was considerably higher than ourselves and our client expected, and their desire to
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1 Sherman Road, Bromley, Kent BR1 3JH 020 8315 5454
complete quickly suited the sellers perfectly. A deal was duly agreed shortly before Christmas, and contracts were exchanged just a few days into 2020.
We’re a positive bunch, but even we are occasionally surprised by the premium a determined buyer will pay for a certain property. Without expert agency presence, how do you know what your property might be worth? Give us a ring…
120 Bermondsey Street, London SE1 3TX 020 7089 6555
acorncommercial.co.uk commercial@acorngroup.co.uk @acorncommercial
BEXLEYHEATH DA6 Our services are regularly recommended to the owners of properties with apparent development potential by local solicitors, surveyors, wealth managers and other professional colleagues.
A property can only be sold once, and whilst any developer will tell you their offer is the best you’re likely to get, there have always been many more buyers than opportunities! It’s therefore vital that anyone selling a property with development potential takes expert advice.
In this instance we were recommended by TG Baynes Solicitors. The client was a second generation family investment company, and the asset was, well, a mixed-bag! Covering a quarter acre plot the property comprised residential, retail, office, storage & workshop space. During more than 50 years ownership the condition of the properties had deteriorated considerably, and with ongoing maintenance becoming more time-consuming and costly, the family decided to sell. Interest had been forthcoming from developers and investors, but with a lack of lease agreements to document the various occupancies, nobody was willing to take the property on warts-and-all. Whilst time wasn’t necessarily of the essence, our
concerns about a sale centred on our clients’ ultimate ability to provide vacant possession. The property undoubtedly offers potential for redevelopment, but we concluded that with some active management, the investment value could rival, if not exceed the residual land value for development.
We were instructed to market the property, and set about generating interest from investors as well as developers. Several offers were received, and as we suspected, a sale of the going concern was agreed to buyers who intend to improve rather than redevelop the existing buildings. The sale was completed on an unconditional basis, so there was no delay in waiting for a planning application either.
LEWISHAM SE12 We’ve been assisting the Joint Liquidators in the dissolution of a property company with a number of assets in and around Lewisham. Last October we sold a partbuilt development site for £4.15M, and in November 2019 our commercial team was instructed to sell this mixed-use freehold property.
Comprising a commercial unit occupied by a firm of solicitors, with three small self-contained 1 bedroom flats above, the building was fully let and generating £45,900pa. Offering both break-up potential and active management angles we undertook a high profile marketing campaign. As with all income-producing assets currently, the property proved very popular and numerous offers were received. The successful bidder completed the acquisition in January 2020 at a blended NIY of 5.8%.
1 Sherman Road, Bromley, Kent BR1 3JH 020 8315 5454
120 Bermondsey Street, London SE1 3TX 020 7089 6555
acorncommercial.co.uk commercial@acorngroup.co.uk @acorncommercial
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CROYDON CR0
We’ve been particularly busy with development site sales in South Croydon over the last couple of years, and our reputation put us in touch with the owners of an attractive site on the popular Purley Oaks Road.
After acquiring the site back in 2015 with an existing planning consent in place, we were asked to advise on the value of an improved scheme comprising 5 flats and 4 houses. A lengthy planning process, opportunities elsewhere and some confident advice from our development team had our new clients convinced that a sale was preferable to building the site. With the sellers keen to utilise the proceeds of a sale imminently, they wanted to avoid even the relatively short delay of a marketing process. With this in mind, we quickly went to work and introduced a local developer who had recently missed out on another site. Contracts were exchanged within the month, and our clients were able to successfully deploy their newfound funds elsewhere.
We’ve been South London’s leading development agent for over 20 years, and are perfectly placed to advise landowners and developers on up-tothe-minute residual land values.
SIDCUP DA14
Over the last 12 months or so income-producing assets have overtaken consented development sites as our hottest commodity. Now that interest rates have been slashed to almost zero in light of the Coronavirus pandemic, we anticipate even greater demand for existing buildings capable of generating rent. Funding might start to prove a challenge (again), but for cash-based investors, where else will they get a better return and long term capital growth?
Towards the end of 2019 our commercial team was instructed to sell this freehold residential investment in Sidcup. The property comprises four self-contained flats; all let on AST’s and producing a total rent of £46,350pa. No national advertising campaign was required. We have over 17,000 applicants on our database, and our electronic mailshot generated a host of enquiries. Several busy block viewings were held, and numerous offers received. A deal was agreed with a Manchester-based investor who exchanged and completed simultaneously just a couple of days before Christmas.
If your business requires a cash injection and you own the building you occupy, why not consider a sale & leaseback? Alternatively, if you have a property similar to that above, or even just an individual Buy-To-Let from back in the day, please contact us for some free advice entirely without obligation.
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1 Sherman Road, Bromley, Kent BR1 3JH 020 8315 5454
120 Bermondsey Street, London SE1 3TX 020 7089 6555
acorncommercial.co.uk commercial@acorngroup.co.uk @acorncommercial
CROYDON CR0
Recommendations are generating an increasingly large percentage of our new business, and they’re coming from a wide variety of sources. In this particular case, the surveyor acting for a local charity suggested that we had the necessary expertise to maximise the value of a key site in Central Croydon that was surplus to requirements.
Tom Luck began advising the charity back in 2016, and quickly established that price, rather than timing, was the key driver. The charity’s own surveyor had confirmed an existing use value for the building that comprised ground floor retail space, a lower level bar and offices in the upper parts. Tom, however, highlighted the development potential of the site, and was confident of generating a considerable premium. The sellers had neither the funds nor appetite to promote the site for development, and as such we set about sourcing a local partner. Terms were agreed with a Croydonbased developer, and a process of consultation began with Croydon Council. Anyone in the industry will appreciate that no planning application is straightforward. In this case, the town centre location and key corner aspect drew even greater focus on the proposals. Suffice to say much work was undertaken between 2017 & 2019!! Planning permission for a landmark scheme comprising 60 flats, new retail units and a purpose built basement music venue was approved at committee in early 2019. It took another 6 months to execute the Section 106 Legal Agreement that accompanies every major application nowadays; following which the charity set about procuring
vacant possession. The sale successfully completed in early 2020 at a price considerably ahead of the existing use value. The moral of the story is that planning promotion is by no means easy, but with the right blend of expertise, time, money and effort invested, certain properties can achieve premium prices.
ELEPHANT & CASTLE SE17
The second of two unbroken assisted living blocks that we’ve recently sold for Hyde Housing Association; completion in this particular matter took place in March 2020 at £4M.
Located opposite the landmark Elephant Park regeneration scheme, the subject property comprised 16 one bedroom apartments within a tidy, but somewhat dated purpose-built block. In addition to the obvious planning and investment opportunities, the property may offer the potential for a replacement tall building, particularly given the scale adopted opposite. Our client, however, required a prompt unconditional sale with completion before the end of March. Ever eager to please; that is exactly what we delivered!
1 Sherman Road, Bromley, Kent BR1 3JH 020 8315 5454
120 Bermondsey Street, London SE1 3TX 020 7089 6555
acorncommercial.co.uk commercial@acorngroup.co.uk @acorncommercial
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IN A NUTSHELL
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1 Sherman Road, Bromley, Kent BR1 3JH 020 8315 5454
SUNDRIDGE PARK BR1
GROVE PARK SE12
A standalone office measuring approx. 700sqft with the benefit of off-street parking and a high quality fitout. We quickly concluded a letting to a cleaning company for 6 years at £21,500pax.
Grove Park is a busy local hub with a dense residential catchment area and excellent rail links. Retail space is at a premium, and as such we had no trouble letting this small unit to a barbers at £11,500pax.
WELLING DA16
BEXLEYHEATH DA6
Freehold commercial properties are always well sought-after, and this vacant two storey building with 3,700sqft of office and warehouse space was no exception. Sold to a developer for £625,000.
Estate agents like to look their best, so the team in our Bexleyheath branch were delighted when we let the adjacent unit to a hairdressers on a new 12 year lease at £18,000pax.
CHARLTON SE7
SEVENOAKS TN13
After several abortive sales to ‘direct’ buyers, we were instructed to sell the former Charlton Liberal Club. We nailed it at the first time of asking, and to a cash buyer at 20% over the guide.
We’ve sold countless churches and chapels over the years, but few as twee as this former Kingdom Hall on the outskirts of Sevenoaks. The buyer paid more than £470/sqft, and proposes a surgery use.
BERMONDSEY SE1
WALWORTH SE17
A prominent retail unit c900sqft on the permanently busy Old Kent Road with A1 & A2 use. Let at £20,000pax on a new 10 year sure term with an upward only review at 5 years.
Substantial 5 storey freehold comprising nail bar and 6 bedroom maisonette. Massively under-let at £28,800pa, the building offered active management and development potential. Sold at £810,000.
120 Bermondsey Street, London SE1 3TX 020 7089 6555
acorncommercial.co.uk commercial@acorngroup.co.uk @acorncommercial
MEET THE TEAM
Adam Hosking Head of Agency
Jeff East Director
Tom Luck Director
Lily Whitby Senior Secretary
Steven Flannighan Commercial & Development Agency
Louis Markham Commercial & Investment Agency
Jamie Stevenson Commercial & Development Agency
Izaak Thomas Commercial & Investment Agency
Kevin Nartey Commercial & Investment Agency
Adam Miles Commercial & Development Agency
Rosie Davis Team Secretary
Hollie White Team Secretary
REPORTS IN NEXT ISSUE SOLD
SOLD
CROYDON
SOLD
LEE
SOLD
EAST DULWICH
1 Sherman Road, Bromley, Kent BR1 3JH 020 8315 5454
WELLING
SOLD
BROMLEY
120 Bermondsey Street, London SE1 3TX 020 7089 6555
SOLD SIDCUP
acorncommercial.co.uk commercial@acorngroup.co.uk @acorncommercial
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