More transactions and fewer distressed businesses for sale
SCOTLAND’S commercial property market is picking up pace again, with a greater number of transactions and fewer ‘distressed’ businesses for sale.
That was the message from property agents Graeme Smith and Jonathan Clough, who pooled their 25 years’ experience when they established Smith & Clough Business Associates last year.
The business partners noted “real signs of positivity and optimism” edging back into the marketplace during 2013, after a “steady” level of transactions and “cautious” buyers the previous year.
The increase in activity and transactions recorded in the second half of 2013 “bodes well” for the commercial property market going into 2014, according to Graeme Smith.
“As our company has grown over the last few months it is clear to see that the market is improving,” he said.
“Sellers seem to be more realistic now on price and are willing to listen to reasoned advice to discuss the best way forward to sell their business, which, in turn, has increased the levels of transactions taking place.
We have seen far higher levels of activity in the last six months which bodes well for the market going forward.
“Without transactions, there is not the comparable evidence for buyers and, more importantly, surveyors to justify higher valuations and sale prices, which are required to allow deals to happen and, in turn, the market to grow.”
That there are fewer ‘distressed’ businesses coming on to the market is reckoned to be another positive sign, helping to improve values and sale prices.
“When the market is dominated by businesses in administration or liquidation, where the sale price achieved tends to be well below that being sought for a similar yet non-distressed business, then this has the knock-on effect of bringing overall values down,” said Jonathan Clough.
“As fewer distressed businesses come to the market and we see more and more ‘normal’ sales taking place, then we should start to see values creeping up again, and are already beginning to see some evidence of this. We have seen far higher levels of activity in the last six months than we have experienced for the last few years in the licensed, leisure and retail sectors, which gives us great encouragement for the future.
“All in all, there is much to be positive about as we move forward into 2014 and, if you are thinking about selling your business or looking to grow your portfolio, with the correct advice and guidance the process needn’t be as stressful as you possibly anticipate.”