Whilst the market is always seeing new entrants, the core private property company and the private investor remains the bedrock of the market.
The two exceptions in the last period are one Fund who continue to divest their smaller assets in the retail and roadside sectors with some success. Whilst LPA Receivership sales are not prevalent, we have dealt with a significant consensual sale of a portfolio which amounts to over 10% of the £300m raised in this period.
Other vendors include corporate bodies and pension fund trustees who have assembled some very high quality assets. Proportions remain static on a historic basis with little change that we shall report more fully on at the end of the year.
Summer Review buyers survey
Our buyers survey is unique to us and has run since 2012, we have picked up on four key themes so far this year.
Demand has never been stronger for demand for £1m+ lot sizes, with 47% of buyers surveyed wanting to invest over £1m.
The second key theme centres around the geographical spread of buyers. There is a significant rise, 10% in local buyers buying close to their homes – from 45% in 2018 it now stands at 50%. This trend recognises that in difficult or uncertain times it is local buyers who benefit from micro knowledge and are happy to invest in their home regions ahead of more national buyers.
Buyers are increasingly relying on cash to fund the purchase to completion at least, 76% as against 73% in 2018. Whilst lending is historically very low cost, the timescales offered by finance houses can allow them to finance auction purchases, completion is typically done in cash.
We are aware of one High Street lender working on a strategy to offer quicker facilities, which is scheduled for delivery in mid 2020 at the earliest.
Finally, we picked up at our July auction 92% of buyers surveyed intend to buy again within 12-months, so demand is clearly there.
The presence of overseas capital is often hard to assess as UK based companies are typically the buying entity. The year has seen the continued presence of overseas investors, with the rare appearance of an Australian investor and the ongoing spending of some Southern African buyers.
The weak pound will no doubt incentivise them further to invest via the familiar and accessible route of the auction.