Depending on who you ask the word market will be described in different ways. But I think the following definition is all-encompassing and succinct – the process by which buyers and sellers interact in a competitive situation with a view to exchanging goods in a transaction.
The main role of any market is to provide the means for sellers to achieve the highest price for their goods and buyers to pay as little as possible. But both parties should be armed with knowledge about the way their market operates and the price it has placed on the goods they are seeking to trade.
This is where the problem exists in commercial property. Distressed sellers are finding it hard to accept that prices have fallen and are trying to achieve prices that aren’t aligned with market values.
It is upsetting when someone is in financial difficulty, but also bewildering when they ignore advice or cursorily reject a solution to get out of their predicament.
Some of the people who contact us are eager to sell but we are often surprised at the price they aspire to. I can understand their scepticism when talking to us, as we are the buyer, but we always suggest they seek independent advice and look at the hard facts.
The Investment Property Databank index for August showed growth of just 0.1% with industrial values falling. For the market to break its stagnation and for distressed sellers to mitigate their paper losses, a degree of realism needs to arrive on our shores.