Sector distribution 2015 to 2017
The sector distribution analysis shows remarkable consistency in the make-up of our catalogues over the past 3 years.
Retail investments continue to be the predominant offering, accounting for 76% of all lots sold by volume and 67% by value. This mirrors the figures from H1 in both 2016 and 2015 and is significantly ahead of the preceding 3 years. Of the 100 lots sold for £1 million or more, 62% of these were retail assets. These figures show continued demand and confidence from investors in this sector, perhaps dispelling any long standing concerns over the high street.
The proportion of sales in the highly sought after industrial sector were in line with the 2016 results, again representing 8% of total value with a 2017 realisation of £26.4 million. Nine lots were sold for over £1 million, accounting for £17.8 million of sales.
Other noticeable trends include a 61% increase in the average lot size of medical investments to £840,000 (£520,000 in 2016) and also in Motor Trade properties, up 105% to £1.4 million (£682,000 in 2016).
Whilst the volume of offices sold remained consistent with 2016 at 5%, the average lot size increased by a significant 29% to £1.13m (£877,000 in 2016) with 11 lots selling for £1 million or more. This boosted the value of offices sold to 9% of the total raised – in line with the 2015 figure.
Regional distribution 2015 to 2017
The volume of lots offered in London has increased steadily over the past 3 years, with a slight increase in value this year to 18% of total raised (17% in 2016).
London and the south east remains a strong focus, representing a cumulative 35% of all lots sold and 45% in terms of value. Of the total raised in London and the south east, 62% was from lots which sold for £1 million or more.
It is evident that appetite for the larger lots remains strong throughout the country. Of the 100 lots which sold for £1 million or more, 46 were outside of London and the south east, contributing nearly £83 million to the total raised in the regions.
Looking at Scotland, Wales and Northern Ireland combined, the total sales value increased 47% compared to 2016 with the number of sales up by 27%. This trend may continue in light of the general election in June where a significant reduction in seats for the Scottish National Party may have diminished the likelihood of a second independence referendum, thus providing more stability to the Scottish market.
Yield analysis 2013 to 2017
Yields overall for the first half of the year have once again remained remarkably consistent with little change to yields achieved for both the best quality lots and the secondary lots.
However as the graph below shows yields have risen slightly since the Brexit vote and in the case of the highest quality lots yields have moved out back to where they were in early 2016. The Hi-yielding average has moved higher than seen in 2016.
Overall retail yields have moved in a narrow band since the Election in 2015 and are currently just below their highest level achieved just after the Brexit vote last summer.
There is a slight indication of a rise, but with interest rates unchanged in the period, it is unsurprising that average yields have not materially changed. The slight changes observed are more likely to be a product of the slight variance in the range and variety of lots sold from auction to auction.