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Surge in demand for people using auctions to buy commercial property

Posted: Tuesday 24 April 2018

AUCTIONS are becoming the go to method of sale when its comes selling commercial investment properties, according to a leading Westcountry based commercial property agents Charles Darrow.

Charles Darrow Network Auctions have reported a sharp rise in the sale of commercial investment and development property across the South West since Christmas.

Among their recent sales has been Lloyds Chambers in Barnstaple, The Flying Horse in Exeter and Western Rise, Torquay.

Figures show that the first quarter’s commercial auction sales in the South West are significantly ahead of those for the same period last year. Lots being offered are up by 18%, lots sold are up by 21.3%, with 87% of lots being sold.

Some properties end up at auction because a sale has fallen through, perhaps because of difficulties with bank funding or delays, and the vendor needs to sell by a certain date.

This presents opportunities for private buyers whose presence at auctions is continuing to grow steadily and the days of everything being sold to developers or investors are over.

Property auctions are attractive to sellers as they provide them with protection because the property will be withdrawn if it doesn’t reach its reserve price. Reserve prices are always realistic, but never disclosed. It is somewhere within the guide price range, but sellers will keep the exact figures under wraps ahead of the auction. It also gives them certainty as it typically takes just 20 days for the sale to be completed because all the information needed for the sale is available before the auction.

Lloyds Chambers a mixed-use commercial investment was sold on behalf of a local property investor looking to capitalise on part of his portfolio and a top end guide price was achieved.

Meanwhile, the Flying Horse in Exeter was sold on behalf of local publican with a pre-auction bid in excess of the guide price being achieved. It was sold to local property developers.

And Charles Darrow Network Auctions were instructed to sell former care home, Western Rise in Torquay by a regional care home operator and they successfully secured a pre-auction bid in excess of the guide price. It was sold to a care home operator looking to re-open the care home. 

Charles Darrow Network Auctions director Paul Heather pointed to these recent sales as evidence demand for buying commercial property at auction is steadily growing.

Paul Heather said: “It’s showing that confidence is there. 

“It’s very much a barometer of what’s happening in the marketplace and it’s a fair reflection of where the market is right now. People are still buying investment property for the substantially higher returns than those achieved by investing their money elsewhere. People are recognising that auctions are a quick and successful method of selling property. In particular, they are perfect as a route to market for landlords who can sell with tenants in occupation. 

“Auctions are a very competitive environment and we fully expect forthcoming auctions to see even stronger sales activity.”

Charles Darrow Network Auctions next auction is on July 12. You can view the lots online when they become available at networkauctions.co.uk where you will also find more information about how to buy property at an auction.