September Commercial Property Auction Market Update

Commercial On Its Hols But Strong Summer, September Looking Busy…

Just as with residential, the commercial property market has endured a volatile couple of years.

Volatile, perhaps, for very different reasons: High street commercial property has been badly affected by Covid and the shift to online retail with much redundant property finding its way into the auctions. This should be balanced, to some extent, by increased demand for warehouse and logistics space.

Also as with residential auctions, August is a slow period in the commercial arena. Indeed, it goes on holiday completely in some cases. Many of the well-known names in commercial auctions such as Allsop, Acuitus and Strettons opt not to have a sale between the end of July and the end of September.

So let’s look at a few trends in commercial over the wider summer period 2022 and indeed over the last year.

Overall the commercial auctions sector is a smaller sector than residential. According to Essential Information Group figures, over the last year, commercial auctions have made up only 15% of all auction lots – although they represent around 25% of all auction sales by value.

EIG figures suggest that the commercial sector may have performed more strongly than residential over the last year.

Looking at August 2021 to July 2022 they report that, compared with the previous year, the numbers of commercial lots offered were up 16.1% versus a 7% fall in residential lots offered. Numbers of commercial lots sold were also up – in this case by 12.5% compared to a 7% fall in residential lots, although there was a 3.1% fall in the actual percentage sold.

Looking at July 2022, 383 commercial lots were offered – a 7% increase on July 2021.  The total raised from commercial sales was £131.1m, a notable 17.3% increase on July 2021.

A report from a leading commercial auction house also appears to confirm that this market is buoyant. The latest Acuitus Commercial Property Auction Data (cPad) report shows that Q2 2022 sales were a full 29% higher than the 10-year Q2 average.

Acuitus Chairman, Richard Auterac, comments: “The UK commercial property auction market across the UK remained resilient. Lot sizes over £1m accounted for 23% of all properties sold, raising £87.3m out of a total of almost £150m.”

Lastly, let’s look ahead to upcoming commercial auction sales in September. Judging by the lots already listed for sale, September looks like being a busy month.

Acuitus already have 48 lots listed for their live-streamed September 22 sale. Lots range from a vacant office building in Avonmouth guided at £2-3,000 to a freehold supermarket investment let in Crawley guided at £8.75m.

Allsop have 227 lots listed to be offered online on September 20. They range from a vacant freehold warehouse/redevelopment site in London, SE13, and guided at £50,000 to an industrial estate investment in Sittingbourne at £4.75-£5m.

Now that the summer is ending and the auctions get back into full swing it’s likely that the September returns will give us a much more likely indication of what is going on in the commercial market.