Commercial repossessions being sold at auction now comprise 18% of all lots sold under the hammer as banks work through their loan books.
According to analysis by Essential Information Group, 286 distressed lots are due to be offered for sale in the fourth quarter, up from 158 in the previous one.
Year-on-year figures for the quarter so far are up by 12.6%.
The value of distressed lots as a percentage of all commercial lots sold at auction has also been steadily climbing.
In Q1 2009, they made up 5.5% of all lots sold and accounted for 2.5% of the total value of sales.
They now make up 18.3% and account for a quarter of the total sales volume.
Auction houses including Allsop Commercial, Lambert Smith Hampton and Acuitus are including significant numbers of repossessed stock in their final catalogues of the year.
LSH auctioneer Oliver Childs said 30% of all lots it had offered over the past 12 months were repossessions – a trend that would “unquestionably” continue due to an acceptance that the market would not improve for three to five years.
He said: “We have got to the point now where an awful lot of money has been knocked off commercial property.
“Average values on the typical properties I am dealing with have fallen by 30% to 60%, so the bank has been left holding the baby for a number of years now.”
Some 44% of the firm’s December catalogue were consensual sales, said Childs, up from 17% in October.
“We’ve got to the point where the banks have more commercial exposure than they want,” he explained.
Allsop Commercial will offer 128 lots, of which 35 are receiverships, at its 4 December sale at the Park Lane Hilton, W1.
Acuitus will hold its largest end-of-year-sale so far on 6 December at the Millennium Hotel, W1, when it offers 54 lots, 12 of which are receiverships.
samantha.baden@estatesgazette.com
