Land & Commercial News Letter Q2 2020

2ND QUARTER 2020

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Redundant C2 premises recently sold for major housing charity Abbeyfield…

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Another institutional sale completed for a charity during lockdown…

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This commercial building in Sidcup hadn’t been offered to the market in over 70 years…

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Virtual freehold High Street retail investment sold...

EDITORIAL Jeff East — Director

jeff.east@acorngroup.co.uk Well, the second quarter of 2020 will certainly go down as a memorable one, and not for the right reasons. The Acorn Group has been very fortunate in that the majority of our staff and their families have survived the worst effects of Coronavirus. It seems drastic to use the term ‘survived’, but the sad reality is that many haven’t, and we’ve certainly heard too many horror stories to not take the matter very seriously.

Regardless of whether I know you personally or not, I hope that you and your family are similarly safe.

In our last Update circulated at the end of April I reported that many staff were on furlough, and our offices closed.

Thankfully that is no longer the case.

All of our branches and offices are now open, albeit with a lighter staffing to ensure that we can comply with social distancing guidelines. We have many other staff working from home, and regardless of the relaxations permitted from 4th July we intend to stick to the

2m rule until we can be certain that the virus has passed, and our staff and clients are safe.

The market is moving though, and for the most part there has been no negative impact on demand or indeed values. The first few weeks of lockdown were tough, but by the end of April demand had returned, and we’ve actually enjoyed a very productive quarter in terms of business. You’ll note over the following pages that we’ve had no trouble filling this Update with transactional news, and the restriction of lockdown has made for some interesting stories.

Trends across the wider Group have been similar in that April was a grind, and the staff did very well to get any business done at all. Since then though the numbers have recovered very quickly, and to a surprising level. I’m writing this editorial on the second last day of June, which in fact is already our best month for residential sales in over five years! There was a lot of stock left on the market during lockdown, and lenders restricted themselves to ongoing files, but can such incredible numbers just be down to the bottleneck of pent-up demand? I certainly know of a few individuals who have

bought or agreed to buy new homes over the last few weeks, and in each case they have been driven to invest more money than they would otherwise have done in ensuring they have a bigger or nicer home to live in. After all, what use is a new car or desert island holiday if you can’t leave the house?!

I sincerely hope that we don’t suffer a second wave of infection, but if we do, I’m convinced we’ll cope. We can now exist, work and socialise from home far more happily than most of us ever thought possible, and in the property industry we have an asset class that is simply always in demand.

Meanwhile though its business as normal at Acorn, and we’re very keen for new instructions. If you have a commercial property, investment or development site to sell (or let) our team would be delighted to offer you a free appraisal. We’ll visit in person maintaining a safe distance, you can give us a tour via Zoom or Facetime or we can try and assist over the telephone – however you feel the most comfortable. I hope you find the next few pages interesting, and as always we’d welcome any questions relating to specific properties or deals.

BROMLEY BR1 The care sector has undergone massive reform in recent years, leading to a spike in the sale of C2 facilities.

Changes in legislation have included an increase in minimum room sizes, mandatory en-suites for new rooms and a tightening of the staff to patient ratio. As a result operating margins have been squeezed, homes due for refurbishment have become unviable and many private operators have moved out of the market.

It’s certainly not all bad news though. New operators have entered the sector throwing big budgets at the creation of much larger, purpose built homes. And for those selling out of the industry, the blow has been softened by the attractive premiums being paid for their redundant premises.

We’ve sold countless former care homes in recent years, and for a variety of purposes. Buyers from the private day nursery industry, however, are increasingly proving the most competitive, and in this quarter alone we’ve sold two former care homes for that very use.

This particular building was formerly two large semidetached houses, but had been operated for many

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1 Sherman Road, Bromley, Kent BR1 3JH 020 8315 5454

years as a 22 bedroom care home. Frustrated by dwindling margins, our seller saw early retirement as a more attractive option, and we were instructed to market the c7,000sqft building with vacant possession. Offers were received from a variety of sectors, but despite requiring a change of use, the best bid came from a day nursery operator. The unconditional sale completed without a hitch, and right in the very middle of lockdown!

120 Bermondsey Street, London SE1 3TX 020 7089 6555

acorncommercial.co.uk commercial@acorngroup.co.uk @acorncommercial

ELTHAM SE9 Acting for major housing charity Abbeyfield, we recently concluded a very quick sale of this vacant former care home on Eltham’s popular Corbett Estate.

In truth we’d had the property under offer for most of 2019, but despite numerous calls on our part for the client to bring matters to a head, they stayed loyal to a buyer who ultimately proved unreliable.

The final straw proved to be a further delay blamed on the Coronavirus outbreak, at which point our clients finally allowed us to remarket the property.

Despite being in lockdown we were able to use marketing material that we’d previously gathered, and had a virtual tour prepared as soon as it was safe to do so. Several offers in excess of the guide were received, and terms agreed to an investor with a previous track record in the purchase of similar properties. Given the delays experienced previously the buyer’s promise of a 5 day completion seemed a little far-fetched. In fairness though, they weren’t far off – the sale was completed just 10 days from receipt of papers!

The new owners intend to operate the property as a day nursery once a change of use is forthcoming, whilst the previous buyers may very well live to regret that one last attempt to move the goalposts…

WELLING DA16 Freehold commercial properties are proving a hot commodity at present, and particularly those with development potential.

When the long-established legal practice of Gough, Clinton & Broom was taken over by TG Baynes, their former offices on Bellegrove Road became surplus to requirements.

Extending to over 3,000sqft and with a large yard to the rear, the property was ripe for redevelopment. The partners made an application under permitted development rights for the creation of 4 flats above a small ground floor retail unit.

We were asked for advice on the possible sale of the property, and the owners were delighted to hear that we anticipated a value of at least £675,000. As is typically the case our marketing generated considerable interest, and we held several busy block viewings. Numerous offers were received,

1 Sherman Road, Bromley, Kent BR1 3JH 020 8315 5454

and a deal agreed with local developers with a long track record in the immediate area. In spite of the lockdown the sale successfully completed in April 2020, and at £720,000. Needless to say our clients were delighted!

If you have commercial premises to sell from a merger, acquisition or maybe just as a result of a change in operating practice, please contact one of our offices for a free, confidential appraisal.

120 Bermondsey Street, London SE1 3TX 020 7089 6555

acorncommercial.co.uk commercial@acorngroup.co.uk @acorncommercial

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PECKHAM SE15 Apparently the saying “a bird in the hand is worth two in the bush” dates as far back as 1450, and in the property industry, it often occurs to me that it’s a good mantra to live by.

The value of a property can be affected by so many variables including planning, politics and economic conditions; all of which are almost entirely out of a seller’s control. With that in mind it’s very often the case that the highest offer is not necessarily the best offer.

We were instructed as joint agents in the marketing of an industrial site in late 2016, and at the time we only sought unconditional offers from buyers with a proven track record. This was a prime site; allocated in the local masterplan and of a sufficient size to attract the big name developers. We guided at £12M, and received several cash offers in excess of £14M.

Despite having the joint representation of two longestablished local agents, the seller had been entertaining interest for years, and ignoring his own mandate for an unconditional sale, instructed us to accept a conditional deal at £16.7M. Suffice to say it took over a year to exchange contracts, another 18 months for a planning application to be submitted and even after a further 12 months of negotiation and deliberation, there was still no light at the end of the tunnel. Fast forward to Spring 2020 and the business had closed, and the contract was heading

TOTTENHAM N16 A particularly proactive approach was required in order to ensure that maximum interest was generated in this property, and the best possible price achieved.

We were instructed by the Tottenham War Services Institute, and launched our marketing campaign as soon

towards expiration. With seemingly little other option, the seller sold unconditionally at £10.7M. Not an inconsiderable amount of money, but how does that saying go again?...

as the Government announced that estate agents could trade following the strictest phases of the Covid-19 lockdown.

Under normal circumstances we would have held several block viewings, and welcomed as many interested parties as possible. With social distancing protocol very much in place though, that simply wasn’t possible on this occasion. Instead we had a virtual tour prepared, and were only able to allow a select number of pre-vetted potential buyers access to the property.

The property comprises a Grade II Listed building with D1 use and extends to almost 9,000sqft over four storeys. Prominently located and with ample parking, we were certain that regardless of public sentiment and restrictions on movement at the time of marketing, considerable interest would be forthcoming.

Guiding at £2M we fielded a huge number of enquiries, and competition for a viewing slot was fierce. Following an informal tender, terms were agreed with a private school who exchanged contracts within 10 days! The price, I hear you ask? £3M on an entirely unconditional basis – proof itself that the market is still very much alive.

We’re vastly experienced in the sale of properties for charities and other institutions, and tailor our marketing strategies to suit individual buildings and prevailing market conditions. If you have a similar property to sell anywhere in the South East please get in touch.

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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

KENLEY CR8 The Covid-19 pandemic, and in particular the Governmentimposed lockdowns, have to date had very little impact on our pipeline. There were, however, a limited number of unfortunate cases elsewhere where a combination our factors had a knock-on effect.

In the early stages of the first lockdown we were contacted by a solicitor whose client had lost their buyer, and in turn was faced with their dream move collapsing. Our team rarely deals with private house sales or chains, but in this case the client had agreed a sale to a developer. Developer no 1 had secured planning permission, but traded its contract to developer no 2 who failed to complete twice, and ultimately couldn’t come up with the money!

experienced and well-funded. The moral of the story is that if you believe your property has development potential, employ an agent to look after your interests – we’re here to sort the wheat from the chaff, and only get paid on success, so you truly have nothing to lose.

Our task was quite simple – to find a buyer who had cash available, and would be willing to exchange and complete the purchase within 3 weeks. Furthermore, despite being unable to complete itself, the developer refused to release the copyright to the planning drawings!

Anyway, long story short, we found a buyer willing to take a view on the planning drawings, and who promptly stepped in to save the day – completing with cash in the required timeframe. Our sellers in this case had agreed their original sale directly to a buyer who claimed to be very successful,

SIDCUP DA15 We were very proud to be appointed as agents in the sale of this commercial building in Sidcup – for no reason other than it hadn’t been offered to the market in over 70 years!

Most similar buildings nowadays have had the upper parts separated off as offices or flats, but this property is still laid out as it was built; with retail space across the ground floor and non-self-contained ancillary workshops over the upper two floors.

Having served as a home for our elderly client’s upholstery business for so long, it was quite understandably a wrench for him to see it sold.

Absolutely hell-bent on getting the best possible deal, we set about generating as much interest as possible.

A deadline for offers was set to encourage competitive bidding, and terms were agreed with a private investor at a shade under £500,000. Contracts were ready to be exchanged just as the Covid-19 outbreak was becoming serious, and the buyer cheekily tried to use the pandemic as an excuse to reduce the price. We took the view that our client had owned the property for so long, and commercial freeholds are so popular that we’d always be able to replace the buyer. Fortunately, Mr Purchaser saw sense, and exchanged at the agreed price.

We have a long list of buyers for commercial freeholds, and the marketing nouse to maximise value, so if you have a similar property to sell please get in touch.

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

EAST DULWICH SE22

BROMLEY BR1

Long leasehold lock-up shop approx. 320sqft on a prominent corner plot between Honor Oak Park & Peckham Rye. Sold to a private investor for use as his own offices.

Virtual freehold investment comprising double shop unit let to a mini-market on a straight 20 year lease at £45,000pax. Sold to a cash investor for £595,000 (7.2% NIY).

SIDCUP DA14

BROMLEY BR1

Freehold ground rent investment comprising two maisonettes sold on long leases; one with just 36 years unexpired. Sold on behalf of executors to an investor for £57,500.

Substantial D2 shell approx.

4,100sqft over the 1st & 2nd floors of a building set just off the High Street. Let on a short term basis at £25,000pax.

PLUMSTEAD SE18

BECKENHAM BR3

Vacant freehold site sold for £150,000 on behalf of Hyde Housing. No planning in place but obvious potential (stpp). Bought by a local developer who hopes to build 3 flats.

High Street retail unit extending to approx.

1,500sqft over ground and basement floors. Let to a beautician on a 10 year lease for £27,000pax.

EAST DULWICH SE22

BROMLEY BR1

Attractive detached office building on back land plot with PD for conversion into two apartments. Sold for £445,000 to a private local developer.

Retail unit approx. 1,713sqft in The Mall in central Bromley. Let on a short term licence to a neighbouring retail operator.

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

LET

CHISLEHURST

ADDINGTON

LET

SOLD

EAST DULWICH

1 Sherman Road, Bromley, Kent BR1 3JH 020 8315 5454

HALSTEAD

120 Bermondsey Street, London SE1 3TX 020 7089 6555

SOLD

CROYDON

SOLD

SIDCUP LEWISHAM

acorncommercial.co.uk commercial@acorngroup.co.uk @acorncommercial

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