December Commercial Property Auction Market Update

What Happened This December in the Commercial Property Auctions World?

December is normally a busy period in the commercial auctions market. Buyers and sellers look to get deals done now – as the commercial auctions market traditionally goes into hibernation for a few weeks each New Year with few sales being organised. But did the bleak economic news over the last month serve to dampen the seasonal spirit in the market this year or not?

Allsop’s final commercial auction of 2022 raised £34.1m from the sale of 72 lots, with a strong sales success rate of 86%.

Highlights of the sale included a portfolio of 19 sale-and-lease-back William Hill betting offices which attracted high buyer interest due to the security of income. Also a portfolio of veterinary practices one of which sold for around 40% over the guide price after competitive bidding involving 10 investors.

George Walker, Partner and Auctioneer at Allsop, reports: “Despite a series of political shifts affecting market confidence and protracted economic instability, we’ve had a successful 2022. Since the start of the year, Allsop’s commercial auction arm has sold a total of 715 lots, raising a combined £544m, with an overall success rate of 89%, in spite of the challenging market conditions.

“Thanks to the depth of our market knowledge and the relationships we’ve built with our sellers and buyers over the years, we’ve been able to continue transacting and offer compelling opportunities to our buyers. We look forward to returning to the virtual ballroom in 2023 with a greater number of enticing investment opportunities”.

Acuitus held their final sale of 2022 on 15 December. It achieved a success rate of 84% and raised £10.6m. Highlights included a tenanted retail store in Weston super Mare, Somerset, which sold pre-auction at close to its guide price of £1.4m. In the case of a freehold office in Newcastle under Lyme, Staffordshire, competitive bidding pushed the eventual selling price of £800,000 well above the guide price.

Richard Auterac, Chairman, says: “At the end of 2021 no one could foresee how things would change in 2022; but change they did. Change is a continual process and investors are learning how to adapt to some of the severest economic headwinds that have been experienced in 50 years.

“Although commercial property has come under sustained pressure in 2022 so has every aspect of the financial and economic world. The tangibility of bricks and mortar is highly attractive to many of our clients and there is now the opportunity to invest at attractive yields in assets which had been valued too highly.

“The volume of assets we have sold and the consistently high success rate we have achieved stand testament to the quality of assets brought to auction and the consistent depth in investor demand.”

He adds: “Several properties from our catalogue were bought by investors who were seeking to add assets to their portfolios before the Christmas and New Year break. Our early survey of underbidders suggest that they still have funds to allocate to real estate. This bodes well for the market in 2023.”

As 2022 comes to an end the commercial auctions market has continued to be busy – commercial buyers and investors seem to be keen to buy at auction and have money to spend. However, to a great extent, the market is being driven by realistic pricing and the opportunity to get good value. It seems likely that this busy commercial market will continue into 2023 as long as that remains the case.