Cannon Capital - London,

Date: 07 Jul 2010

Return Of Long Term Income Investors Propels Cannon's Second Auction To £5m.

Cannon Capital's second auction on 1 July displayed a gaining sense of momentum with £5m in sales achieved.

The auction room at Claridge's Hotel in London's Mayfair was fuller than its first auction and there was quite a buzz generated over bouts of intensely competitive bidding for the mix of commercial and residential lots.

Auctioneer James Cannon said: "We have seen a return to the market of private investors keen to buy long dated income and looking for good returns on their investment. There is a sense of pragmatism after the election evinced in their decision to get on with it.

"However buyers are very discerning in a market that is still very black and white. They are either interested or not. This is displayed in the auction room with lots equally capable of either attracting three bidders or none. Our success rate on the day was 55%. But post auction, of the seven lots remaining unsold, we have very strong interest in five of the properties."

The first lot of the afternoon was a 813 sq ft building in Cambourne let to the Cambridge Building Society, at £22,000 per year, with 15 years unexpired on the 20-year lease. It sold for £365,000, roughly in the middle of the guide price range, reflecting an initial yield of 5.8%. It was bought by a high-net-worth individual looking for the long term income.

A modern multi-let industrial estate in Salford, generating £280,995 of rent per year, sold for £2.95m, a shade under the £3m guide price. This reflects an initial yield of just over 9%.

Residential developer Goldcrest Homes bought a 0.74-acre development site at Gypsy Corner, Acton, London for £935,000. But it was the last lot, an adjacent, newly built, vacant, community centre which surprisingly generated some of the most intense bidding. It sailed past the upper guide price of £75,000 and eventually was bought by a North London investor for £103,000.

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