Commercial property sellers adopt auctions
Commercial property sellers are taking cues from residential property sellers and opting to put their investments under the hammer, according a Waikato real estate agency.
NAI Harcourts managing director Mike Neale said he has noticed an increase in the number of sellers choosing to go to auction, with property owners increasingly fans of an opportunity to maximise returns.
Five properties, from a site on fast food alley Greenwood St to central business district character buildings like 610 Victoria St, are going under the NAI hammer on November 28.
"Vendors, when they are serious about selling and moving on with their lives to do various things, are saying they want to deal with cash unconditional buyers and realise they need competition to maximise the value . . . those are the two predominant drivers," Neale said.
He said any extra costs incurred going to auction are passed on to the seller, but they were minimal.
Bayleys Waikato regional manager and auctioneer Stephen Shale has also seen an increase in commercial property auctions year on year. But he said for his agency, it is an ongoing trend. "Our auction volumes are up on all of the years we've traded here and this year is our highest volume, by about 5 per cent though so it's not a big increase," Shale said.
"Auctions have been around for a long time now and it's an acceptable method of sale for many people, but with more confidence in the marketplace we can create a better competition."
He believes some of the appeal is the transparency of the auction process.
"The main thing is that auctions create theatre and competition, but it's a very transparent process because buyers can see their competition," he said.
"They should be most comfortable in trading under that manner and because the owners haven't started with an asking price, they are really saying to the market, ‘Come and tell me what it's worth and if I like your offer I'll take it, and if I don't I keep the property'."
- Waikato Times