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Private Investors Desert Equities for Commercial Property at Auction

LONDON-Interest in commercial property at auction is currently running at an all time high as private investors seek alternative means of maximising returns in a difficult economic climate, according to Jones Lang LaSalle.

By John Ryan | Updated on October 16, 2003

LONDON-New research from Jones Lang LaSalle’s IPD Auction Results Analysis System shows UK commercial property auctions running at an all-time high. With £221 million ($368.24 million) raised at auctions so far this year, an increase of some 30% over the same period a year ago, commercial property continues as a prime target for private investors.

According to the numbers from JLL, commercial property in the auction room currently provides returns at around the 10% mark, while retail, the main attraction, is offering returns of 14.6%. Interestingly, a substantial amount of the money being spent at such auctions is from individual capital reserves, if the results of a poll of buyers taken in the JLL July Auction provide a guide. Loans for the properties being bought represented a modest 64% of value and 36% of those questioned did not seek a loan to fund their acquisition.

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