Prezzo restaurant sold online at 5% net yield

Fund manager OLIM Property has made its first sale through an online auction, selling a Prezzo restaurant at a 5% net yield to a private investor.

The property, in Sudbury, Suffolk, was sold for £1m through investment agent Singer Vielle, using a real-time online auction.

The freehold restaurant is let to Prezzo until 2045 at a rent of £55,000 pa.

The property was owned by ASDA Pension Fund Trustees, a discretionary fund management client of OLIM Property.

Singer Vielle uses the click-to-purchase platform, which allows exchange of contracts (digitally signed) to be conducted electronically.

The platform can also be used to invite online binding “best offers” or to conduct a real-time auction online – as in this case.

Unlike eBay-style auctions, it uses a live auctioneer who interacts with a bidding audience to emulate a sale in the room.

Jo Seth-Smith, investment manager at OLIM Property, said: “There’s not an awful lot of long income available at the moment.

“Retail and leisure is a sector that private investors are very comfortable with, so when you’re looking at a long-income property like this, you’re aware that your likely buyer is a private investor – and they are likely to buy at auction,” she said.

“We were happy with the 5% yield. You don’t see a lot going for sub-5% outside London.”

For sellers, conducting a bespoke sale at a time they choose, instead of waiting for the next in-room auction, is an attraction of the online model, said Seth-Smith.

The bidder registration process also allows sellers to assess the level of interest and adjust pricing accordingly, she added.

Shepherd & Wedderburn acted for OLIM Property.

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