Commercial Auction Summer Market Review Webinar
On Wednesday 16th September we launched our Commercial Auction Summer Review in a live webinar.
The review examines the rapid digitalisation of the sales channel and how lockdown has accelerated the process, how pricing has been impacted across the sectors, some feedback from buyers and how the rest of the year might play out.
Despite lockdown, the commercial auction team have raised £246m year-to-date and over £397m combined with the residential team, from the sale of 1,008 assets. No other market place has seen this level of activity.
If you missed this webinar you can click on the link above, or download a copy of the PDF of our comprehensive review.
Some of the Q&A’s from our webinar:
Q: Will we ever see the return of the ballroom auction????????????????
A: We hope so. When the rules allow
Q: Are you seeing/ expecting a return to notable volumes of receivership stock in the auction process or are the banks behaving differently
A: Our residential team are seeing a steady flow of receivership sales. We anticipate more commercial sales later this year/early next
Q: Have you noticed any material change in the profile of sellers and purchasers at your auctions?
A: Not really. Our market is still dominated by private investors and property companies
Q: Do you see the high street becoming rather like farm land in the UK – everyone likes to see it’s there but no one uses it nor does it make money without subsidy support?
A: The use will evolve but there is just too much space. Stockport Council have been proactive in buying one of their two shopping centres with a view of turning it into public open space. That is radical but it will help reinvigorate the town
Q: Where do you see yields for well let convenience stores?
A: They can get below 5%. It really depends on location and the property itself. For example are the upper floors included, or does it have a car park etc.
Q: Other than branded convenience stores, are there lot sizes, locations and types of retail that have fared more resiliently than the wider market view would otherwise indicate?
A: The smaller lot sizes are more resilient because more people can afford them. In terms of location and types of property, London and the SE remain very popular as do neighbourhood shops.
Q: What is the biggest lot sold under lockdown?
A: In early May we sold a job centre in Tottenham for £7m within three days
Q: Any views on when the gated property funds will return to the market and start selling?
A: A couple have recently become ungated and others will no doubt follow later this year.
Q: What are your views on offices in small satellite towns around major city centres and how they will benefit from changing working patterns?
A: In theory their popularity should improve in the short term.
Q: Do you think there are more new entrants because there isn’t anywhere else to buy commercial property in lockdown?
A: The number of new entrants is consistent with our pre-lockdown stats.
Q: What are your thoughts on Knight Frank starting an auctions division – is this good news for the sector?
A: Yes, very much so. We welcome new entrants and hope their involvement will bring new sellers and buyers.
Q: Are sellers pushing back on your pricing advice because their valuations are higher in this current market?
A: Some do, it really depends on how keen they are to sell.
Q: Have you seen an increase in buyers failing to complete and losing their deposit and if so is that because they haven’t got the debt they need to complete i.e. banks have gone back on funding offers, banks have stopped providing funding or because the buyer has got cold feet?”
A: We haven’t really seen a rise in failed completions. This is likely countered by the rise in cash buyers (87.5%) using cash.
Q: There has been a lot of coverage of the convenience store sector – are there any others that have consistently been popular and have delivered good returns over the years?
A: Yes, the popularity of the industrial and roadside sectors have helped them to perform very well
Q: Last year you sold a few shopping centres, but seem to have had a quiet time in the last 12 months. Can you see them coming to auction?
A: Yes, highly likely. It will depend on their lot size. We often work with our national investment team on these.