Bargains up for grabs as agent to hold distressed property auction
A distressed property auction will be held in Belfast in September in a bid to emulate the multi-million euro success of a Dublin sale earlier this year.
Commercial property agent Osborne King said holding its first auction in over four years was a "bold" move but that it was convinced "the time is right".
A spokesman said: "Osborne King's auction team is confident that this forthcoming auction will prove to be an excellent opportunity for investors, owner-occupiers and developers to acquire product at realistic and affordable prices."
Residential and commercial properties as well as development land, all for estimated prices of £50,000 to £500,000, will be up for grabs on September 29.
Properties already on Osborne King's books include Ballycastle's Marine Hotel and the CDC Leisure chain of pubs in Belfast city centre.
Managing director Martin McDowell said such properties could form part of the auction, which he estimated would consist of between 25 and 50 lots.
He said: "It's very early days, but I estimate the auction could consist of up to 75% residential properties and the remainder commercial."
Mr McDowell said he expected interest to come from banks, receivers, administrators and individuals. The firm said it had been influenced by the high-profile success of Allsop's property auction at the Shelbourne Hotel in April, which drew enthusiastic crowds and total sales of over €14m (£12.5m).
Mr McDowell said: "It may seem a bold move on our part to be re-engaging with the auction process - however, we have been monitoring the market closely over the past three years and are now convinced that the time is right and that demand exists for an auction.
"We have begun to see some movement in the local market but confidence remains fragile, so in our view the public need to see that prices have bottomed out in order to kick start activity at realistic property values.
"Our auction will provide opportunities to buy good quality property at sensible value levels."
The closing date for entries to the auction is August 17.
Mr McDowell said the economic downturn had seen some commercial property values, rents and yields come down as low as they had been when he started his career in 1983. He said: "From both a seller's and purchaser's perspective, an auction is one of the most transparent, efficient and effective ways of buying and selling property, particularly when one considers the clear benefits such as signing a contract on the day, no opportunity for price chipping in addition to completion within 28 days."
"As a company with a strong track record in this area, and with a sound knowledge of the overall property market, we urge those with an interest in property be they prospective buyers or sellers, to come forward."
However, Stephen Deyermond of commercial property agent TDK said he was unsure about the auction process.
"I am not convinced it is the way to go in the north nor is there any need for it," he said.
"In a depressed market people go to auction to look for bargains and in my view most borrowers and banks do not want to take a 'bargain basement' price for an asset.
"To date financial institutions' strategy has been to sell an asset once the value is optimised rather than have to place a property in an auction with a low reserve and not being sure of a sale."
Allsop and its Irish affiliate Space sold 81 out of 82 lots in its auction and is set to hold another next month.
Such was public enthusiasm for the Dublin event that the April auction was shown live in a neighbouring pub.