Auction market springs to life

RICS Commercial Property Auction Research Q4 2007

PR012

The commercial property auction market recovered some ground in the fourth quarter of 2007 following depression in the previous quarter, says RICS research released today (29 March 2008).

The total value raised at commercial property auctions rose from the lowest level seen in two years of £292m in Q3 to £487m in Q4. There was a near doubling in amounts transacted in the London market (at £70 million) with most UK regions witnessing a rebound in activity in Q4. However, only Scotland and Wales saw an increase in deal values compared to the equivalent period a year earlier. In the London market, activity is down by around 25 percent in both value and volume terms compared to the previous year.

Overall, 1245 commercial properties were sold at auction in Q4, an 11 percent decline on the equivalent period a year earlier. The highest concentration of auction activity took place in the South West, where 178 commercial properties were sold, followed by the North West and South East, where 171 and 166 deals took place respectively. In London, 73 commercial properties were sold at auction up from 65 in Q3. Oliver Gilmartin RICS senior economist, said:

“It is too early to tell if the near term pick up in auction activity heralds a return in confidence in the mainstream market. The last quarter of the year typically sees an increase in activity at auction houses, with this year being no exception.

On going credit problems are likely to continue to weigh down on commercial prices in 2008 as investors and occupiers remain cautious. The knock on impacts from financial constraints should be less acute at the auction house as smaller lot sizes are less exposed to weakness in the commercial business and mortgage market.”

ENDS

About RICS

RICS (Royal Institution of Chartered Surveyors) is the mark of property professionalism worldwide. It covers all aspects of property, construction and associated environmental issues. RICS has 140,000 members globally and represents, regulates and promotes the work of property professionals throughout 146 countries. RICS is governed by a Royal Charter approved by Parliament which requires it to act in the public interest. It is also a professional regulatory body approved by Government (HM Treasury).

Notes for editors:

The data is provided by the EIG (Essential Information Group)     http://www.eigroup.co.uk/

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