The momentum in the market we saw building towards the end of 2013 continued strongly at our first auction in February. The auction was well attended and high levels of competitive bidding saw the average overage above reserve (i.e. for those lots sold under the hammer) rise to 18% from 15% in December 2013. Grade A retail yields moved in to 5.8% from 6.3% and Grade B retail yields hardened to 7.4% from 8.8%. This confirmed, as we suspected at the end of 2013, that the appetite for risk amongst buyers was returning. On the day we raised £34.9m with a success rate of 85%.
This sentiment continued with our March auction, giving our largest Q1 result since 2008. It also included the largest lot ever sold on an auction contract at £13.5m. Whilst properties with redevelopment or active management potential were popular, the well located and well let properties attracted particularly keen bidding resulting in Grade A retail yields hardening further to 5.4%. However, buyers appeared to exercise more caution particularly outside of London and the South East with the average Grade B retail yield moving back out to 8.2%. On the day results were £77.9m raised with a success rate of 82%. With sales after, our Q1 results now stand at £120.5m, a 20% increase on 2013.
Our May sale raised £77.8m on the day and was our largest Q2 auction since 2007 with a success rate easing to 75%. Whilst this was our lowest success rate of the past 18 months, it has since improved to 87% following sales after. Grade B retail yields stayed broadly the same at 8.4% but Grade A moved back out to 6.2%.
Our July auction was the UK’s largest single day commercial auction in terms of lots offered. In terms of amount raised it proved to be the largest since our July 2007 sale. £95.6m was raised reflecting a success rate of 80% on the day. The auction room was again full with a vibrant atmosphere that was maintained throughout the day. Grade A and B retail yields remained broadly similar to May and the average overage above reserve remained steady at 18%.
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