How can insolvency practitioners and receivers best approach real estate challenges?

Taking into account the wider restructuring or insolvency plans, there are a number of strategic decisions to be made to ensure the best course of action is taken to unlock value within tight timescales, write Andy Thompson and Matthew Hattersley at BTG Eddisons.

Real estate advice

When appointed, IPs and receivers can be presented with a myriad of different property types in varying states of construction, condition, dilapidation, occupancy and compliance. Whichever hand is dealt, real estate advisors who can support with strategic decision-making with the wider restructuring plan in mind can help to support the best outcome.

This can be as simple as undertaking a valuation and supporting with the disposal through agency or auction routes. However, in some cases it can mean managing properties, including leases and tenancy, through administration, providing insurance brokerage, advising on maintenance, compliance and repairs, and even providing options for upgrades to enhance value for sale.

There can often be a complex web of multiple properties, land and assets, portfolios can be dissected and composite parts sold and marketed strategically to ensure the best value is achieved. We are seeing more businesses working with our expert real estate advisors to rationalise property portfolios and unlock value to reinvest in evolution, recovery or sustainable growth.

In these instances, dissecting the overall asset base into more manageable parts allows for a more strategic view on disposal, selecting auctions or private treaty sales through agents on an individual basis to secure the best outcome and sale. Not only does this often generate more value more quickly as selling a larger portfolio at once can often take time, but it also sees the property put to better use by a new owner.

The evolution of auctions

Property auctions have long been a helpful tool for receivers and IPs with their speed and security of sale particularly helping in liquidations and administrations to quickly extract value from assets.

The perception has usually been that auctions are either only for the difficult-to-sell assets, situations of time constraints or when no other route has worked. However, as auctions have evolved and grow in popularity with buyers and sellers, more receivers and insolvency professionals are cottoning onto how auctions can be more of a strategic tool, and opting for this route first.

Property auctions have changed dramatically from the traditional in-room roots that some receivers and IPs may be familiar with. This is largely driven by the shift to online and livestreamed auctions during the pandemic, and the wider reach has resulted in a growth in popularity.

According to our analysis of Essential Information Group data, the number of total auction sales in 2024 was 90% higher than in 2020. In addition, the number of sales in 2024 through livestream auctions grew by 174% compared to 2020, while online sales grew 99% and in room sales declined by 27% in the same period. The data also shows that while in 2019 in-room auctions accounted for 96% of the total sales, by 2024 the proportion was only 9%.

Livestream auctions have really led the charge with creating a useful tool for sellers. Largely driven by necessity in the pandemic, this variation combines a live feed of the auctioneer on the rostrum with the ability to bid online, giving buyers the access to the auctioneers’ knowledge of the lots and creating an atmosphere of competition akin to the in-person experience.

By leveraging digital channels to offer a remote option, more flexibility has been afforded to buyers to access auctions without needing to travel or take time away from other commitments. Catalogues now have a varied array of residential and commercial property across the UK and can provide bidders, from first time buyers to experienced commercial developers, with the potential to find a potential opportunity where they may not have considered looking.

For receivers and IPs, this route provides a more varied pool of buyers on a national scale who are committed to purchasing, which in turn delivers more certainty of sale, with the same speed of unlocking value that is required. The element of competition it brings can also in turn result in higher values achieved, an extra bonus for maximum return to creditors. This means more and more we are seeing auctions being chosen as the first course of action and not the last.

What is the benefit of engaging real estate advisors?

With a multitude of solutions available to suit differing requirements, there is no shortage of choice for those looking to dispose of property assets. The challenge comes from making sure the right avenue is taken.

Working with experienced advisors to select the disposal route to deliver the best outcome for the circumstances is important, and so too is the advisors’ understanding of the local market, alongside having a strong national network of potential buyers to effect a sale quickly.

As an example, to support clients with expertise across the UK, BTG Eddisons has experts across a number of practice areas, from valuations and asset advisory to agency and auctions, who work both nationally and at a local level. This footprint brings the markets in localities like the North West both the ability to understand the asset type and how to best unlock its value but also opens up to a broader buyer network and experience from other corners of the country.

The evolution of property auctions now means that more people, businesses and advisors than ever can benefit from the speed, transparency and security of sale than ever before, which is helped by focusing on providing information upfront and producing committed buyers and sellers. With more of a focus on offering properties nationally, receivers and IPs in the North West can strategically market assets to buyers across the country, in addition to focusing more specifically on buyers in the region. This can help insolvency proceedings greatly when there are time constraints to unlock the maximum value for creditors in a quick timeframe.

As part of the wider BTG group, experts from across the national BTG Eddisons team work closely to advise the insolvency practitioners with real estate challenges, from valuations and disposal through agency and auctions, to LPA Receivership. For instance, working in close collaboration with other service lines, auctions are being deployed as a strategic tool for businesses part of carveouts, restructuring and M&A.

Much like early engagement with financial advice can provide more options to businesses when they are struggling, working closely with real estate advisors and auction providers can identify and select the best avenues for unlocking value before passing the point of no return. Not only does this benefit businesses and communities in the North West, but helps to open up growth opportunities further across the UK.

• Andy Thompson is national auctions director at BTG Eddisons, and Matthew Hattersley is regional director in asset advisory, restructuring and recovery at BTG Eddisons.