2011 should offer real opportunities in the auction room for both buyers and sellers.
The gulf in the expectations of the two sides of the auction equation that stalled the sale of some assets in the summer is now narrowing. Today, buyers have a clearer grasp of what type of assets they wish to invest in and sellers know what prices are achievable if they want to sell.
Sellers should be encouraged by demand
The upward price correction that the market experienced in the early months of the year may have levelled out, but sellers can be encouraged that there are large numbers of genuine cash buyers in the market who are prepared to compete strongly for the right type of assets. As has been shown by the autumn and winter sales, when a property matches investor criteria then demand can be exceptionally high.
Acuitus provides a service to sellers that is unrivalled in its depth of experience and market reach. Bringing the right assets to auction at the right time and at the right price is the cornerstone of our approach and is why we have sold more than £100m of assets for clients in what has been a difficult few months for the sector generally.
Buyers can expect a strong flow of assets
For buyers with cash and some funding, the opportunities remain exceptional. Property yields remain attractive in comparison to other investment media while a shortage of debt funding means there is not the level of competition that was seen at the height of the market.
The unwinding of many receivership and distressed debt situations will undoubtedly bring more good quality product into the auction room and this will provide excellent strategic openings for investors looking to build their holdings.
Today, a thorough knowledge of the market is vital and local information is a pre-requisite for the successful purchase of investments that are not simply let on long leases to tenants of robust financial standing. Security of income is of paramount importance and this demands a depth of analysis which entails more than just a cursory review of a property’s lease.
We welcome the more forensic approach to purchasing as we believe it will help reconcile the aspirations of buyers and sellers.
Acuitus aims to provide a personal service to buyers and offers a level of detail in the catalogue and website that reflects this heightened need for information. Through Acuitus Finance we also assist buyers with their purchases by sourcing a tailored debt package from lenders.
Economic calm will benefit the sector
Whilst there will certainly be continued economic difficulties in the short term, the overall picture is much clearer than at the beginning of 2010. The problems in the Eurozone are being addressed while, on the domestic front, the full ramifications of the UK’s fiscal cuts are being factored into future business planning.
Accordingly, we anticipate that 2011 will provide a less volatile backdrop for the property investment sector and this will feed into the auction room.
Outlook
We see 2011 as being a year of opportunity for property owners to sell into a more certain market where there is a greater consensus on value.
For some assets where occupier demand is weak and lease expiries are looming, we do not see prices recovering quickly and there may be further falls in value. However, next year will undoubtedly bring a large number of properties into the auction room that represent exciting prospects for investors.
Auctions will continue to provide a mechanism for assisting owners with the restructuring of their holdings. Acuitus offers a specialist and independent service that can help them and buyers realise their investment objectives.
The property investment market is undergoing a major reconfiguration at present and history may show that 2011 was a year of exceptional opportunity.
The next two Acuitus auctions are on the 22nd February and 7th April 2011 at The Millennium Hotel, Grosvenor Square, London W1. We are currently compiling the catalogues for these sales and would be pleased to discuss your requirements.
