At an auction last week, Sidney Phillips saw just one pub sell, as six sites were sold beforehand. A previous sale saw seven out of 10 go before, with just one selling at auction. And an auction of Enterprise Inns’ sites in September last year saw 11 out of 15 sites sell beforehand.
Sidney Phillips’ managing director Robin Mence said: “A disproportionate amount of people prefer to buy a property before the auction, a lot of them don’t like the lottery of it. This has increased a little, we had been seeing 40% of properties up for auction sell before, and in the past four auctions it has been nearer 80%. But the past few haven’t been large auctions.”
He added: “I don’t think a large volume of properties will go to auction this year as there is a gradual fall in corporate disposals. The sites some pubcos are now offering are also of better quality and at higher prices. Generally, the higher the price, the less suitable a site is for auction. There are usually a lot of cash buyers at auctions with £100,000 in their pockets, rather than £500,000.”
The West Midlands-based property firm CPBigwood sold three out of six pubs prior to auction at the beginning of the month, with one selling after the event.
Company director Ian Tudor said: “A lot of the properties at auctions have already been on sale with one of the big licensed property agents, so when they go to auction the prices are reviewed downwards and become more attractive.”
Properties are likely to sell only days before an auction, Tudor added.