Our commercial transactional team is predicting a rise in online auctions for commercial properties in 2025. This expectation comes after consistently observing outstanding results in low-stock areas, where properties have sold well above their guide prices. To understand why commercial property owners might increasingly favour this modern sales method, we spoke with Lauren Allcoat, a senior associate at our Worcester office.
While private treaty is the traditional method of sale for commercial properties, we are seeing increasingly positive results with online auctions. One of our latest sales – a 3,689 sq ft warehouse unit in Worcester – achieved 34 per cent above the guide price and significantly above the reserve. The lack of stock in this particular area meant that it attracted a number of competitive bidders which ultimately drove up the sale price, providing a strong result for the seller.
Although online auctions aren’t suitable for every commercial property (they are becoming more popular for smaller lot sizes and more unusual assets). Sellers are exposed to a number of benefits which often results in strong sale prices, and money in the bank in a faster time period. Because of this, we expect 2025 to be a strong year for commercial property auctions.
Efficiency and speed are some of the main benefits for sellers, with the legal pack prepared upfront, the auction day being fixed and legal exchange upon the close of the auction providing the reserve has been met. As all property professionals know, private treaty can result in long, drawn out negotiations with sales sometimes falling through during the process.
For online auctions, we are typically seeing properties marketed for 28 days, legal exchange when the virtual hammer comes down and then completion in a further 28 days, meaning that properties can be sold in just two months – a very impressive prospect to those wanting to dispose of stock at pace.
Wider reach and market exposure is another key benefit which is supporting the increase in popularity for online auctions for commercial properties. Attracting national buyers not specific to a geographic area increases the chance of finding competitive bidders, offering buyers and investors from anywhere the chance to participate.
Transparency is something which potential buyers find particularly attractive, with them having visibility of the current highest bid and being able to place competing bids in real-time. This means that the process attracts serious buyers who are ready to commit and can clearly see what others are willing to pay – something not offered when going through private treaty.
So as online actions have strong benefits for both the buyer and seller, providing a convenient streamlined transaction process, increased exposure, transparency, efficiency and competitive pricing, it is a method of sale which we expect to see more commercial buyers, as well as those looking to expand their portfolios, turn to in the next year and beyond.
