Published by Estates Gazette 06.03.26
In the same way that the technological revolution of the past two decades has transformed almost every area of commerce, the proliferation of online auctions is enabling a new generation of investors to access the direct property sector.
In this respect, 2025 was a watershed year for online auctions – empowering people to buy commercial properties in the same way as they might previously have bought shares for their investment portfolio. The significance of this should not be underestimated – especially in the UK where increasingly onerous regulation and softening values are seeing investors turn away from the residential sector.
It’s easy to forget that until around five years ago auction bidding was predominantly the process of people gathering in a specific place at a particular time together with a few telephone bidders. Online auctions have lifted the physical and logistical barriers that used to limit access and have significantly increased the pool of national and international potential buyers. It is hard to overstate just how significant this new pool of liquidity has been, and will continue to be, during the next decade.
In the same way that the raft of utilities privatisations in 1980s spawned a new generation of private individual equities investors, online auctions and other initiatives such as the new Aquis Real Asset Market are encouraging people to invest in commercial property by demystifying and democratising the process.
For auctions, one of the drivers of this trend is the buying of commercial properties to put into self-invested personal pension plans. These investors often may buy the property their business occupies or feel most comfortable acquiring an asset which is local to them. In this context, tapping into buyers who are located in the same area as a property gives reassurance to sellers who want to be confident that every potential purchaser has been reached and that the best price has been achieved.
As such, online sales have been a huge step forward. In the past, if you were, say, an investor in Leeds who was interested in a particular auction lot in Harrogate then travelling to London to attend a sale and hoping you were the successful bidder represented a considerable investment in time and money. Online sales remove these barriers and make the buying process more accessible.
And, of course, the opposite scenario also applies in so far that online auctions can bring opportunities to you, wherever you are located. For example at our last auction, a very attractive retail investment in Winchester was sold to an investor who was bidding from Monaco.
It will be interesting to see how this evolving variety of buyer demand will shape both the geographic and price profile of asset sales. With access to relevant data platforms and also the sort of experienced knowledge that we provide, buyers can develop a more wide-ranging view of the market and the investments which suit their objectives.
At present in the UK, London is still the dominant destination for buying and accounts for around 35% by value of all sales. London offers resilience and, by definition, a wide pool of buyers to whom you can sell if necessary. But for investors who are looking at a lower entry cost that can enable active asset management then there are other locations across the country which can better fit the bill.
These trends are being played out at the same time as many investors turn their back on the residential market. More than a decade of harsher tax treatment and increasingly onerous legislation is seeing the ‘buy-to-let’ boom which began in the 1990s gradually wane. The UK private rented sector is increasingly dominated by large scale specialist providers and institutional investment.
And for a new generation of investors looking to access the commercial sector, it is the exit of the institutions from many areas of the sector which is creating fresh opportunities. Falling valuations have seen many assets drift down to a level which no longer justify retention in institutional funds. However, many of these properties – which have been let on rebased and realistic rents – represent opportunities for private investors to secure attractive income returns that are not subject to the type of income volatility to which the equities markets are subject.
The final piece of the jigsaw is the availability of finance at terms which do not overly erode income or make development unviable. Stuart Buchanan of Acuitus Finance is reporting that lenders are prepared to take lower margins and this is enabling increasingly favourable terms for borrowers. However, it’s to be hoped that the speed with which finance can be obtained will also be improved by new technological and AI innovation as at present it feels out of step with the needs of investors.
Overall, the trajectory of the UK economy and the ability to start generating the kind of ‘feel-good factor’ which powers spending remains vital as these ultimately feed into commercial property values. Keeping inflation under control and providing more sustainable mortgage costs can assist this, and hopefully 2026 can prove to be an economic turning point which encourages growing numbers of ‘NextGen’ investors to enter the commercial property sector.
Richard Auterac is Chairman of the specialist commercial property auction house, Acuitus and Chairman of the RICS Real Estate Auction Group
