The amount of commercial property sold at auction is on the rise and small investors are increasingly among those looking for a piece of the action. Figures from CBRE show that disposals by banks and administrators are fuelling the auction bonanza because it’s an ideal way to dispose of assets quickly.
Last year 2,222 lots were sold at auctions across the UK, compared with 2,160 in 2011 and only 1,989 in 2010. John Townsend, an executive director at CBRE, believes that selling property at auction is no longer viewed as a last resort, but as a method of choice.
“Vendors including banks and receivers are using auctions as a guaranteed method of selling,” he said.
At auctions successful bids are legally binding preventing buyers finding reasons to renegotiate contracts at the last minute. This practice ensures a fair price is “achieved and seen to be achieved.”
The increase in vendors keen to sell at auction is matched by a rise in the number of investors returning to the market. This is particularly true in the case of small private investors seeking an alternative to stocks and bonds, Mr Townsend said, and it is a trend he expects to continue.
“People are realising they can own the building their local bank is in and that must be very exciting,” he added.
CBRE reports that 62 property auctions took place across the UK in 2012, the highest figure for twenty years. While there are lucrative opportunities available to investors at local and regional auctions, the larger events in London will continue to attract the big players looking to expand their portfolios.
While these figures are very encouraging, the auction market, like the commercial property market in general, still has some way to go before it reaches pre-recession levels. In 2006 5,282 lots went under the hammer at 56 events.
Previous Post
Retail Crime Soars by 15.6 Per Cent
