Commercial property auctions such as Acuitus, Allsop, Strettons, Barnett Ross, Eddisons, Barnard Marcus and Savills, as well as an increasing number of solely online offerings such as Auction House, are of enduring, indeed growing, popularity. Punters range from the seasoned investor and developer, to absolute beginners looking to acquire a small local investment to hold in a SIPP.
However, whatever the previous experience and knowledge, the risks (and prospective gains) are almost as great as the amount of prior preparation required. As the expression goes, 'failing to plan, is planning to fail !'
Logic informs that to maximise potential gains in place of risks, the due diligence must not only be thorough, but also appropriate. Contact us for our ‘Commercial Property Auction Buyer’s Checklist’ which details key information to establish in advance including:-
- (1) How strong is the existing tenant/covenant?
- (2) If there is a tenant break option/lease expiry imminent, how likely is the tenant to stay/renew? How relettable is the property if they do not?
- (3) If the current tenant does not renew their lease, how are you likely to fare in the dilapidations claim against them?
- (4) Is there a ‘development angle’ (ranging from converting upper floors above a shop to residential, to demolition and wholesale redevelopment) and if so, how feasible and at what cost/return?
- (5) Is there scope to ‘regear’ the existing lease i.e. extend it/improve the investment?
- (6) Are there any potential ‘time bombs’ in the Title and/or lease?
We have had many a client come to us for the first time after
buying at an auction by Acuitus, Allsop etc
, having made mistakes due to poor, or even no, due diligence. We then ‘damage limit’ so far as is achievable.
Obviously, the preference for all is to avoid such situations and instead, to buy wisely, with the bid tailored by knowledge and understanding.
This is why we implore any bidder at auction, be that Acuitus, Allsop, Strettons, Barnard Marcus, Auction House Commercial etc, to either be absolutely thorough in their own due diligence, or commission specialists like us to do so on their behalf.
Not only is it crucial to get the initial due diligence right, ongoing management of your investments is something which will require the input of property professionals at various stages.
Through RAMAM and our sister niche consultancies of Raeburn Consulting and Radius Consulting, we operate throughout the United Kingdom in maximising returns for commercial property investors with our class leading performance in:
- Rent reviews and lease renewals.
- Property management (from rent collection to insurance valuations, development appraisals etc)
- Dilapidations (Download Dilapps - The Dilapidations App)
- Agency (lettings, sales and acquisitions)
Commercial property auctions by auction houses such as Allsop, Acuitus etc provide unique opportunities to astutely eke out true bargains.
But for those who are not as fully informed as they could and should be, the risk of making very expensive mistakes!
If you are considering bidding at a commercial property auction upcoming by Allsop, Acuitus etc
, no matter how experienced you already are, and feel we could assist with the due diligence, or ongoing management matters, please do not hesitate to contact one of our Directors