From skyscrapers in major international cities to local retail and leisure premises, digital auctions provide a wealth of benefits for both buyers and sellers, writes Richard Watson, head of UK residential auctions at BidX1
In August, 145,000 people across China watched online as two bidders went head-to-head to buy a dragon-shaped Beijing skyscraper in a digital property auction.
The 24-hour sale drew huge interest, which is little surprise given the iconic 39-storey Pangu Plaza Tower 5 building, which covers 1.5m sq ft, eventually sold for £610m.
While it is possible the successful bidder was a film buff – the dragon’s head building can be seen in the 2014 Transformers: Age of Extinction movie – it is far more likely they were interested in the covenant of its tenants, which include the IBM China office and Pangu Seven Star luxury hotel.
This sale highlights the strength of the reach of an online sales platform when selling large and expensive buildings across the world. Digital sales create competitive tension on the day and provide compelling viewing for observers in real time – and 145,000 people in China thought so too.
It is why vendors in the private equity, finance and fund management fields are increasingly using online methods of sale. They understand the benefits of data and transparency and the efficiency of the online model.
This presents a huge opportunity for BidX1. By the end of August, we had sold more than 4,000 properties in the UK, Ireland and South Africa through our digital property platform. We had attracted visitors from 173 countries and buyers from 25.
In September, we opened offices in Spain and Cyprus, meaning that we are now active in five countries and on two continents, and in 2020 we will be active in Portugal, Greece and Italy. This year, we are projected to sell in excess of £430m worth of property.
Our ambition is simple: to be the biggest digital property marketplace. And we are well on track to reach that goal.
Global reach, delivered locally
The BidX1 platform has an expanding international footprint and a growing global reach, but our focus is on providing local market expertise to our customers. We know our markets inside out.
With our data insights and analysis, we can tell that over the past year 38% of bidders were located in London, while 67% of bids were placed on properties located in the English regions, Scotland, Wales and Northern Ireland. We can see a trend towards a search for income stemming from the south-east of England. This information is beneficial when marketing properties and ensuring we are producing the best possible results for our clients.
Our data also provides insights on bidder behaviour. For example, the bidder is in control of how much they increase each bid by, regardless of how much the property is listed for. Even for lots listed at more than £1m, we can see that bidders prefer to increase their bids by smaller amounts but bid more frequently than they traditionally would have been able to.
Our data also points to seasonal differences. In December last year, the average bid increased by £2,500, but in July 2019 it was £1,100. These insights, in conjunction with other data, are a huge asset to our team of surveyors and clients in the run-up to a sale.
But how does an online property marketplace actually work? Let me talk you through the sale of a cricket club from our July auction. Not your average property acquisition, but one that shows the breadth and depth of the BidX1 digital property platform.
Cannock Cricket Club, in Staffordshire, had fallen into receivership, and BidX1 was appointed to sell the property in an expeditious manner. Including two cricket pitches, three artificial hockey pitches, a bowling lawn and tennis courts set within 25 acres of land, from the moment the property was listed it garnered interest.
Of course, every instruction comes with the desire to do well for your client, but the cricket club dates back to 1860 and, with receivership proceedings under way, the club had ceased use, which was having an impact on the local community.
BidX1 was chosen not just because of the international exposure the digital property platform could provide, but because our client was able to have a greater level of control over the contract terms, date of sale and the sale process, with the benefit of a local team of property experts on hand throughout.
Sorting the wheat from the chaff
Marketing of properties such as Cannock Cricket Club comes with its own specific challenges, and having received interest from a number of sources, it was important to sort the genuine interest from the merely curious.
The technology provided by our platform enables the BidX1 team to match bidders with properties in a way that traditional real estate service companies cannot, benefiting both vendor and purchaser.
We know the type of assets potential bidders are interested in, and in situations where we have a lot of particular interest, we can ensure we have verified serious buyers.
With this insight, we were able to advise our client to increase the reserve on the club, ensuring we were still pricing the property to sell, while attracting competitive bidding. The club received a total of 729 bids, driving the sale price 142% above the guide price.
From dragon-headed skyscrapers to local sports grounds, from homes to office properties and shopping centres – they all benefit from a transparent, competitive and global digital method of sale.
It is why online real estate sales are gaining traction, and why BidX1 is ready to take on the challenge of transforming the buying and selling of property around the world.
