Jones Lang LaSalle suffered mixed fortunes in the auction room on Tuesday, as uncertainty over rates and the strength of the market spread through both vendors and buyers.
Stock brought to the market by corporate occupiers, such as Barclays bank sale and leasebacks continued to sell well, but lots offered by private property companies fared badly, with vendors either setting prices at a level buyers would not meet, or choosing not to sell at all until they have a better idea of where rates will settle and what people are willing to pay.
The auction achieved a total sales rate of just 70%, the lowest since December 2003. The sale brought in £24.3m the lowest figure since March 2004, and almost £100m less than the corresponding auction in 2006, when they first received the Barclays instruction.
‘The top of the market has been reached, we’ve known that for six or seven months now,’ Richard Auterac, auctioneer at Jones Lang LaSalle. ‘And when you get to that point people are more cautious.’
The catalogue was much smaller than average, with only 40 lots offered, something Auterac puts down to uncertainty from vendors. ‘People are uncertain about where the market will go,’ he said, ‘and people won’t sell unless they have to.
‘I think we will see a price readjustment in the next cycle of auctions, especially amongst the properties offered by private property companies.’