A SHOP in the centre of historic York has sold for tens of thousands of pounds more than its guide price.

The shop in High Ousegate made £1.36 million at a London auction.

That was way beyond the £1.1 million to £1.2 million guide price set by former owner Prudential investment Managers Ltd for the ground and two upper floors of premises sub-let by Fat Face, the young people's clothing chain.

The buyer at the Allsop & Co auction at London's Berkeley Hotel was a London property group.

The building is let to Genco (SPIL) property investment group on a lease which expires in 2062 at a rent of £60,000 a year. It charges the Fat Face chain £77,500 per year.

Auctioneer George Walker said: "What made it particularly attractive was the double let, and a clear indication that at the next rent review in 2013 there was a capability of raising the rent to the £77,500 level, which the premises can obviously sustain.

"Beyond that is the fact that York, as a heritage city which attracts tourism and therefore footfall, is a very attractive place for retail investors."

Barry Crux, principal of Barry Crux and Company, commercial property specialist in Castlegate, York, said: "This amounts to a 4.4 per cent yield on rental in the hope of increasing the rent by a minimum £17,500 in eight years time.

"It appears to be very speculative, but it is a clear sign of the popularity of commercial property in York as a home for investment money.

"In nearby Stonegate, which is a similar quality trading street, an auction in October 2003 saw prices equating to yields of about 6.5 per cent, but since then there have been dwindling investment opportunities, which has had the effect of pushing up prices and pushing down yields.

"So I'm surprised, but not that surprised."

The price came as no surprise at all to Fat Face. A spokesman at its head office marketing department said: "York is one of the most popular of our 94 stores, being in the heart of the tourist city. The building is bound to be sought after."

Updated: 11:13 Friday, March 25, 2005