Shopping centres on auction
Auctions are a centuries-old and are a proven and efficient method of public sale. Property Auctions in South Africa are fast being regarded as the advantageous method of disposal for a wide range of sellers, from private investors and property companies to banks, housing associations and local authorities. The Property auction sectors have seen impressive growth over the last decade along with familiarity in the public domain. Property Auctions are thrilling and entertaining events. Multiple assets can be sold in a single day, and it is not unusual to see properties fetch prices higher than expected.
Ryan Berry of Deal Core added that auctions are a beneficial way to sell a property. Auction sales can often be closed instantly or within an acceptable time frame, depending on the sellers’ requirements and flexibility. They also transform surplus holdings into cash or earnings assets. An auction is a catalyst for motivating hesitant buyers into action. Auctions expand market reach by employing programs that expose properties to a regional, national and international audience says Berry
Typically, auctions in South Africa have been viewed as an effective means to dispose of properties in liquidation or deceased estates, but along with South Africa’s leading auctioneers, Berry believes that auctions always have, and always will be, a viable way of selling property high profile property.
The concept of selling shopping centers on auction is unique in that it creates a point of finality for both buyer and seller. Nowadays, buying a property, shopping centers in particular, requires an extensive due diligence. Sellers typically engage with prospective purchasers on due diligence basis with time frames sometimes as long as 90 days. The downside to this method is that the seller has now committed to one potential buyer and should that buyer not move forward with the transaction upon completion of the due diligence, the seller is back where he started.
Berry feels that by placing a shopping center on auction with a reputable auction company who understands the fundamentals of property as well as focused marketing strategies, one could speed up the entire process whilst engaging with numerous potential buyers simultaneously and not committing to one individual at a time. The entire process, from instruction to exchange of contracts, can be achieved within as little as six to eight weeks.
The key in selling shopping centers on auction is the implementation of a focused marketing strategy coupled with an informative due diligence pack commonly known as a Bidders Pack or Information Pack within the auction industry. One cannot expect to sell a high value property on auction by simply placing advertisements online and in the newspapers. The auction company needs to understand the property and type of buyer that would be interested. Often the buyers come from target individuals who have previously bought or expressed an interest in similar type properties. One needs to build relationships with these individuals and manage data base information accordingly to ensure that all possible purchasers are presented with an equal opportunity, that opportunity being that each potential purchasers has the probability of engaging in an option to purchase well positioned high end property.
When taking properties to auction in smaller outlying towns, it is imperative to engage with local media, as very often the buyer comes the town in question. Berry is of the view that the marketing plan needs to be designed per property and executed as per the plan.
There are many reasons for a property to end up on the auction block, but the aim for all of them is the same. To sell. Buyers get the opportunity to engage with serious sellers on a transparent and open platform, with all terms and conditions made available for public scrutiny. Buyers have a chance to thoroughly inspect the property prior to auction. Come auction day, the buyer is in control. Buyers know their limits and can choose to walk away if the bidding gets too high.
A competitive auction environment invariably secures a realistic market price. There is an immediacy to auctions that other methods of sale simply can’t match, says Berry “Bringing a Point of Finality to a property transaction whilst offering multiple purchasers the opportuning to engage in a simultaneous due diligence process.”