The picture is of Ramsgate Harbour which is far more attractive than the property we sold!
We have been advising clients of the risks of retail investment for some time and have been recommending that they seriously consider disposing of any retail assets, especially secondary stock.
The well documented structural changes in the High Street and associated retail investment market mean that the risks are far higher than they have been for some time. In our opinion these risks are not yet fully reflected in pricing.
This may not be good for buying but it is certainly good for selling. There remains the opportunity to crystallise gains from retail stock. How long this opportunity will continue is uncertain but we are already seeing retail investment offered at yields that would have been considered extremely attractive just six months ago.
Acting on our advice, we recently disposed of the secondary retail asset in Ramsgate, Kent on behalf of a long-standing investor client.
The property was made up of three retail units let to Ladbrokes, Halifax and a KFC franchisee, producing £95,000 per annum with the potential to increase the rent up to £105,000 per annum on implementation of an outstanding review.
We were able to secure a purchaser at a yield reflecting 6.5%, which we consider to be outstanding given the fundamentals of the investment and its direction of travel.
We very much doubt that such a price will be achievable in a few months.
