Commercial Agents Scratch Their Heads Over £7.5 million Price Tag for Small High Street Shop

Published on: 12 Feb, 2022
Updated on: 14 Feb, 2022

Shock has been expressed at the £7.5 million price paid for the Neom shop premises, in between Superdrug and the House of Fraser in the High Street.

By Hugh Coakley and Martin Giles

Commercial agents have expressed shock at a £7.5 million freehold price paid, said to be twice the estimate, for 103 High Street in Guildford. The property is currently occupied by the well-being and fragrance shop, Neom.

The eyebrow-raising price is in sharp contrast to that of another High Street shop, the former Thomas Cook, travel agents’ shop, on the corner of Quarry Street, which went for just £600,000. It was bought in a “distress” sale and was “a steal” according to a local commercial property agent.

Guildford High Street property sales (based on data from the website, Net House Prices), shows the disparity of prices.

The Dragon became aware of the high-priced No. 103 sale when it received a routine estate agent’s summary report of Guildford property sales. When told of the Neom building price one agent was blunt: “The price must be wrong” he said and another said: “[It’s a] ridiculous price”, but the £7.5 million figure has been confirmed by a Land Registry record check.

Land Registry screenshot for the freehold sale of 103 High Street in July 2021.

The sale, completed back in July 2021 to Meadow UK Retail Ltd, with a registered London address in London but incorporated in the Cayman Islands, was estimated to be around twice the expected maximum based on an estimated rent and expected yields for retail property investments.

The floors above Superdrug are up to be let with sources saying there has been interest “provided the price is right”.

And it is not just the professionals who gasped when hearing the £7.5 million figure. One member of the public said he was “shocked” and was suspicious of the true reasons behind the inflated price.

A local commercial agent said: “There will be a story behind this price” but after “asking around”, he was unable to offer further explanation.

Among the possible reasons put forward was that it might have a premium value by virtue of its position between the huge House of Fraser site and Superdrug on the High Street and ownership was necessary to complete envisaged developments.

House of Fraser was advertised to let in 2020 and in the same year, there were rumours about converting the upper storeys into a hotel (see Ashley Puts Guildford’s Giant House Of Fraser Building Up For Let and Hint Of Plan To Turn House Of Fraser Store Into High Street Hotel).

But there are no known developments on any proposals for the House of Fraser and 103 High Street is a late 17th or early 18th century, timber-framed, Grade II listed building which would make significant changes difficult.

With an estimated annual rent of £166,000, typically gauged at around 10 per cent more than the assessed £151,000 business rates on the Valuation Office website, a 5 per cent return on yield would give a freehold price of around £3.3 million.

Excerpt from the Land Registry plans for the sale of 103 High Street, Guildford for £7.5 million.

Yield values for retail properties have risen from around 4% to 6% over the last 18 months said a local source. He said the increase reflected the higher risk involved in investing in the High Street and the current trend to invest in industrial units rather than retail.

Land registry details show the building to be under a 15-year lease from December 2018, presumably to the retailer Neom.

The former Thomas Cook shop sold for “a steal” at £600,000 in December 2021. It is another timber-framed Grade II listed building originating in the late 16th century.

The sale for £600,000 of 46 High Street, the former Thomas Cook branch in a prime location at the corner of Quarry Street, was completed in December 2020. Sources said it was a “distress” sale with the cash buyer able to complete very quickly. Agents said the freehold sale was “a steal at the price”.

An uncorroborated source has said the ground floor had been let for an annual £80,000 with the upper floors to be let separately as offices.

Older residents will recall that it was the premises of stationers and newsagents WH Smith before it moved a few doors up the High Street, around 1970. A sign depicting a newsboy selling papers used to be suspended from the large bracket that still protrudes from the front gable.

Share This Post