Commercial Auction Summer Review 2017
Home > Commercial > > Buyer analysis

Buyer analysis

Buyer analysis

Asked at the point of exchange, our buyers’ survey, established in 2012, picks up on some compelling trends both continuing and new.

The survey reveals that a high proportion of our buyers are experienced in the room and are not afraid of seeking opportunities outside of their immediate area. They rely predominantly on cash to purchase. Looking ahead to our final auctions, demand remains high for the highest value lots.

Have you bought a property at auction before?

The majority of buyers in the room have bought at auction before (86%), highlighting the continuing popularity of auction as a method of sale (83% in 2016 and 59% in 2012). (Graph a).

How far are you located from the property you have purchased?

As buyers become bolder, so they are venturing away from their “home region”. The volume of buyers purchasing outside their home region increased by 5% (63% in 2017 compared to 58% in 2016. (Graph b).

How do you intend to fund the purchase?

The majority of buyers (80%) tend to rely on cash reserves initially to purchase their property, the highest recorded figure since the inception of the survey (69% in 2016). This maybe reflects an increasingly tougher lending environment. This figure excludes those who anecdotally say they will seek finance post completion. (Graph c).

Do you intend to buy another commercial property at auction in the next 12 months?

Looking ahead, the intention of purchasers to buy again at auction within the foreseeable future remains high at 80% (78% in 2016). This reinforces our belief that this strong demand is being fuelled by a combination of low interest rates, a shortage of stock elsewhere and the wide variety of properties regularly available at auction. (Graph d).

How much do you intend to invest in any single property?

Investor appetite for the larger lot sizes remains strong with over 50% of buyers expressing their desire to invest in excess of £500,000 and 27% seeking to invest £1m+. (Graph e).

Allsop £1m+ Lots YTD

Although this part of the survey looks forward, these figures are somewhat reflective of the make up of the catalogues released this year with £1m+ lots making up approximately 20% of the total stock sold. (Graph f). There is a general increase across the auction market of larger lots being offered by auction. This may be due to procrastination in the private treaty market.