THE UPDATE 3RD QUARTER 2018
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On page 3...
Our development team has concluded a joint venture deal in Croydon.
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Site with full planning permission for 10 houses sold in Whitstable.
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Office suite in attractive converted warehouse successfully let.
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We’re keen for more deals pre-Christmas. Are you buying or selling?
EDITORIAL
Let’s face it – the market has toughened up. There’s no point in glossing over the facts, and those of you that are active in the industry wouldn’t believe me if I suggested otherwise. We are still doing deals though, and lots of them, so I’ll attempt to pick through current logic in the next couple of hundred words.
On the residential side of the market, making sales is proving hard work. Sensibly priced family houses are selling, but second hand flats sub £600,000 are more of a challenge. Help-to-Buy is running the lower end of the market and that is impacting on second hand stock. In my opinion making 40% deposits available (in London) to first time buyers allows sellers to maintain values; in some cases defying market conditions. Why 40%? Most lenders will happily accept a 15% deposit, and if a buyer needs a 40% deposit in order to buy a certain property, the reality is that they probably shouldn’t be buying that particular property. The logic from a buyer who qualifies for HTB is quite simple – armed with a 40% deposit I can buy a more expensive property on a cheaper mortgage deal, so why wouldn’t I do that!? The HTB structure needs changing, but there’s zero chance of that until 2020 earliest, so where does that leave us in the meantime?
Jeff East — Director jeff.east@acorn.ltd.uk
Well, if you’re a house-builder you really shouldn’t have too much to fear. The market is there for you, and as long as they fit the Help-to-Buy criteria, a decent agent will get your finished units shifted. If you’re selling second-hand stock you need to price according to the market. The power sits with the
NUTS ABOUT SIDCUP!
buyers currently, so listen to the advice your agent gives you, even if it isn’t what you want to hear.
Away from the residential sector, whilst the interest rate rise and Brexit negotiations are undoubtedly affecting confidence, the reality is that there’s still value in the market. Most professional buyers have more cash currently than they’ve ever had, and raising commercial finance isn’t particularly difficult either. Commercial lettings are still going well, and there is plenty of freehold stock available so owner-occupiers, investors and speculators still have plenty to play with. Granted, opportunities to make a quick profit without really doing anything are scarce, but who solely bases a business on that concept? We pride ourselves on giving proper, honest advice to clients, new and old. So if you’re thinking of selling, buying, letting or renting a property anywhere in Greater London or across the South East please get in touch. In addition to our expert commercial & development team we have more than 30 residential offices across the patch, so we truly do have our finger on the pulse as far as the market is concerned. In this edition of our Update you’ll notice that the Group has opened yet another residential office, and we’ve disposed of a variety of properties from London Bridge down to Whitstable. Josh Bevan has recently joined the team from John Payne Commercial, and we’re on a serious purge to do lots more deals before the Christmas break. It’s all exciting stuff as far as we’re concerned!
In the last Update we featured Sidcup as ‘Our Hotspot’. We’ve done a lot of business in Sidcup over the years including the introduction of a Travelodge, Premier Inn, Waitrose, Costa Coffee and the development of countless new homes. Sidcup has good housing stock, excellent schools and convenient transport links, but was missing an Acorn office! That changed on 14th July as we opened the doors of our 32nd residential branch on the busy High Street, near McDonalds. Kelly Walsh is the Branch Manager, and would be delighted to hear from you if you have a property to sell or let in the Sidcup area. Kelly can be contacted on 020 3861 0444 or via kelly.walsh@acorn.ltd.uk.
Having already opened new offices in Plumstead High Street, Plumstead Common, Swanley and Sidcup this year, you might think we’re done as far as immediate expansion is concerned — but you’d be wrong! As I’ve said in the past, we’re great believers that proper estate agency services can only be provided by real life experts with actual offices in the local High Street, so we’ll continue to spread our net wider...
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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@acorn.ltd.uk
SOUTH CROYDON CR2
MORE LIKE THIS...
Our advice is tailored to a client’s individual circumstances, and a straight sale isn’t always the most financially efficient way to dispose of a property.
We were called in to appraise a site adjacent to South Croydon Station by its private owner. The property comprised a detached Victorian house that had been converted into 3 apartments, with 8 lock-up garages in the former garden. The client had taken rental income for many years, and successfully secured planning permission for the construction of a new block of 8 self-contained flats. He also had an application pending for 2 further flats in the backland.
Understandably mindful of his tax position, the client sought property in lieu of a straight land sale. Swap deals are notoriously difficult to document, and in any event where assets change hands, a tax point results. We like solutions, not problems though, and so suggested a joint venture (JVs). We’ve successfully arranged numerous JVs between developers and landowners over the years, and to date they’ve all gone very well! We introduced an experienced and reputable local developer, and once planning permission had been secured for the additional 2 flats, the entire property was moved into a 50/50 JV vehicle at an underwritten land value. The build costs will be funded in the usual fashion and the work undertaken by the developer. The landowner will retain finished stock to the value of the land, and the proceeds from the sale of the remaining units will be shared.
Joint ventures are just one strategy that we adopt to maximise value for our clients. If you have a development site to sell and would appreciate some expert advice, please get in touch with one of our offices.
1 Sherman Road, Bromley, Kent BR1 3JH 020 8315 5454
120 Bermondsey Street, London SE1 3TX 020 7089 6555
ANERLEY SE20 Vacant freehold building in a prominent location adjacent to Anerley Station. Offered for sale with full vacant possession and planning permission for the construction of a new 9 unit apartment block. OIEO £1,450,000 F/H
acorncommercial.co.uk commercial@acorn.ltd.uk
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WHITSTABLE CT5
Whilst our reputation as the South East’s leading development agent is based largely on our success in the London boroughs, we regularly sell sites further afield.
We approached the owner of a redundant industrial site in the popular seaside town of Whitstable earlier in the year. The site had full planning permission for a smart scheme comprising 10 modern three bedroom townhouses. Although the consent was clean and tidy, the same couldn’t be said for the land, and its decontamination was causing the owner concerns. Our advice was to undertake the demolition of the old industrial buildings and decontaminate the site before seeking a sale in the open market.
The site, however, had been inherited, and its new owner had neither the funds, nor expertise to act on our advice. Our solution was to introduce an experienced developer that would buy the site warts and all, and undertake the clean-up exercise post-completion. A deal was duly agreed with Maidstone-based Baxter Homes, and a prompt completion ultimately proved to the benefit of all parties.
We’d always prefer to act for a seller, but have retained clients keen to buy land wherever that isn’t possible.
We’re on the lookout for further development opportunities in key towns across Kent, so if you have a property to sell please contact us on 020 8315 5454.
CRYSTAL PALACE SE19
This kind of opportunity is quite simply our bread and butter! We’ve sold hundreds of small development sites with planning permission in place over the last 20 years, but we’ll never grow tired of them.
We have an extensive branch network and specialist New Homes Division that between them sell in excess of 250 residential units across South East London every month. That leaves us perfectly placed to not only advise upon, but also evidence the end values that any given development project is likely to achieve. When we offer a site along with that level of market intelligence to a database of more than 12,000 applicants, it’s fair to say that we get a few phone calls. The owner of this smart site, just off the popular Crystal Palace ‘triangle’, had been in touch whilst his application for 5 new residential units was pending. We ensured that we had a full information pack ready as soon as planning permission was forthcoming, and received no shortage of interest off the back of our marketing.
We worked closely with the preferred bidder’s bank in connection with the valuation, and ultimately concluded a sale at a little over 40% of the Gross Development Value. Please get in touch if you have a similar site to sell.
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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@acorn.ltd.uk
BERMONDSEY SE1
Whilst a little of the recent heat has undoubtedly come out of the SE1 office market, we’re still successfully completing lettings to both established and up-and-coming companies.
More London, The Shard, The Place and more recently the redevelopment of the station have kept London Bridge moving to the point whereby nobody really knew where rents might settle. It’s quite possible that they haven’t settled yet, but the ultimate delivery of those schemes and numerous others mean that the supply and demand balance is currently a little more, well, balanced. Our advice to the owners of these converted offices on Archie Street was to expect a rent of around £40-42/sqft. The space is partly below ground, and includes a large storage area that whilst helpful, impacts on the headline rent. Competition for tenants in SE1 is strong between landlords, and with interest proving difficult to generate, we hatched a plan to get the space let. The property was re-advertised at a low-start rent — a tactic that immediately brought about some fresh enquiries. A firm of interior architects needed to relocate from Tower Bridge Road, and liked the idea that the lower rent early in the lease would help cover their relocation costs. A stepped rent structure was agreed over a 5 year term that will see our clients achieving £40/sqft before they know it. The moral of the story is that versatility is definitely a requirement for landlords, tenants, buyers and sellers in the current market place.
SYDENHAM SE26
The immediate area around Cobbs Corner at the top of Sydenham Road has seen much regeneration and resurgence in its commercial offering in recent years.
PENGE SE20
The wider Greyhound pub site saw some residential development to the rear which proved the catalyst for our letting of a commercial unit to Sainsbury’s, and the re-letting of the Listed public house to a local operator. We had a hand in the redevelopment of a key corner site adjacent to the railway line, and moved our own agency branch into the ground floor of that scheme. We also advised the new owners on their acquisition of the Regent Business Centre site on Kirkdale, and armed with a change of use to A3 on some of the vacant retail space, acted jointly with HNF in recently completed lettings to Nando’s and Mama Dough. We urgently require more well-located A1 & A3 units for bigname retail and leisure tenants.
Hot on the heels of the Sydenham letting to Nando’s, we completed the letting of a former second-hand car showroom on Croydon Road in Penge to Topps Tiles.
Having sold the freehold investment with the car dealers in situ to a private property company last year, we subsequently assisted in the negotiation of a lease surrender to facilitate the Topps letting. With vacant possession secured the landlords completed a schedule of enabling works to bring the property to Topps’ corporate requirements, and the new lease completed during the third quarter.
The landlords will retain the freehold interest of the wider block, but the Topps investment is now offered for sale on a virtual freehold basis.
1 Sherman Road, Bromley, Kent BR1 3JH 020 8315 5454
120 Bermondsey Street, London SE1 3TX 020 7089 6555
acorncommercial.co.uk commercial@acorn.ltd.uk
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IN A NUTSHELL
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1 Sherman Road, Bromley, Kent BR1 3JH 020 8315 5454
BROMLEY BR1
CROYDON CR0
Lock-up A1/A2 unit in a smart building opposite Sundridge Park Station. Extending to approx. 537sqft, a new 10 year lease was completed at an initial rent of £15,000pax to a newly established beauticians.
Small, backland development plot on the edge of Croydon’s busy town centre. Sold for £141,500 to a private developer with full planning permission in place for the construction of a single storey, 2 bedroom house of approx. 675sqft.
PLUMSTEAD SE18
SIDCUP DA15
Freehold commercial investment comprising a ground floor A1 unit with ancillary space in the uppers. Let on a short term lease at £8,000pax. Sold to a private property company for active management.
Mixed-use freehold offered as joint auctioneers with Allsop. Small lock-up shop with 2 bed flat above. Under-let on a wrapped lease at £12,500pax with a review due in December; the property was guided at £225,000 and sold at £270,000.
WEST WICKHAM BR4
BROCKLEY SE4
Sale & leaseback deal comprising a vacant shop with rear store, and 2 bed flat in the uppers. The buyer acquired the shop and store via a SIPP for £345,000, and granted a long lease back to the seller on the flat.
Ground floor commercial unit in the iconic Tea Factory building at Brockley Cross. Extending to approx. 818sqft, the property was acquired on a long leasehold basis for £275,000 for owneroccupation as offices.
BERMONDSEY SE1
BLACKHEATH SE3
Top floor offices c. 840sqft just a few hundred yards from London Bridge Station. We arranged a short-term, 3 year sub-letting of this surplus space on behalf of the current tenant at an inclusive annual rent of £31,000.
Rarely available single development plot in ever-popular Blackheath. Sold to a private developer for £485,000 with full planning permission for a contemporary 3 storey house extending to approx. 1,786sqft GIA.
120 Bermondsey Street, London SE1 3TX 020 7089 6555
acorncommercial.co.uk commercial@acorn.ltd.uk
MEET THE TEAM
Adam Hosking Associate
Jeff East Director
Tom Luck Director
Tony Wood Projects Manager
Steven Flannighan Projects Co-ordinator
Louis Markham Projects Assistant
Jamie Stevenson Projects Assistant
Josh Bevan Projects Assistant
Could This Be You? If you are interested in joining our team, please send your CV to lily.whitby@acorn.ltd.uk
Lily Whitby Senior Secretary
Emma Cramer Team Secretary
ST. SAVIOURS LIBRARY
Rosie Davis Team Secretary
You may have seen the call for unwanted books on the back page of our last Update in June. Well, the books thankfully came flooding in, and we successfully finished the creation of a new library for the children of St. Saviour’s School in Lewisham in time for the new academic year.
The success of the St. Saviour’s project marks the start of a new chapter for The Acorn Group’s community work, as announced by CEO Robert Sargent: “We know for sure that local communities want to help us support projects of this type, so we’re going to take the opportunity to do more. We’ll keep the appeal for the recycling and the reuse of books going, and we’ll be looking at other organisations that need similar help and support to St. Saviour’s.” If you have any old (or new) books that you would like to donate, please drop them to any Acorn office or branch, or contact Emma Fox on 020 8315 6999.
1 Sherman Road, Bromley, Kent BR1 3JH 020 8315 5454
120 Bermondsey Street, London SE1 3TX 020 7089 6555
acorncommercial.co.uk commercial@acorn.ltd.uk
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WE WANT MORE DEALS BEFORE CHRISTMAS! The owners of the following properties are all targeting completions before Christmas 2018, so if you’re in the mood to buy, fill your boots!
BECKENHAM BR3
CHARLTON SE7
Vacant offices and warehousing approx. 7,500sqft in all. Would suit owner-occupier or developer.
Substantial semi with rear coach house and planning permission for conversion into 4 flats. Further potential stpp.
SOUTH CROYDON CR0 £900,000 F/H
HAYES BR2 £POA
Freehold site adjacent to South Croydon Station with full pp for a new block comprising 6 apartments.
Vacant period building comprising 2,800sqft D1 space in ground floor and large residential uppers.
WALLINGTON CR0
BEXLEYHEATH DA6
Mixed-use freehold comprising ground floor café and refurbished 3 bed flat. Total income £34,400pax.
Freehold sale & leaseback comprising triple unit on 10 year lease to historic occupiers at £60,000pax.
OEIO £975,000 F/H
OEIO £950,000 F/H
£500,000 F/H
£750,000 F/H
If you’re up for a deal before Christmas but would prefer to sell rather than buy, don’t be shy – give us a ring!
Pre-Christmas Deal Line 020 7089 6555
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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@acorn.ltd.uk