Christie + Co, the leading property agent and advisor, reports a 126% rise in distressed asset sales in the six months to the end of September, compared to the same period in 2009, as insolvency cases attracted a large number of buyers.
The pubs for sale sector led the way, experiencing a 189% increase in business sales during the six months to 30th September, compared to the previous year, with the care sector seeing a 125% rise.
The hotel market has increasingly come under the spotlight of banks and insolvency practitioners, which is reflected in an 88% rise in the number of distressed hotel businesses sold by Christie + Co during the period, compared to the previous year.
The number of distressed restaurant sales also increased, up 67%. The number of deals in the retail sector stayed flat during the six months to the end of September, mirroring the previous year’s activity.
Christie + Co achieved 88% of the asking price on distressed asset sales during the six months to 30th September, a rise from 81% the previous year.
Selling distressed assets is usually the culmination of strategic review work by Christie + Co’s advisory team, which works closely with turnaround and restructuring bankers and operators to preserve value in businesses that are experiencing difficulties.
Steve Rodell, Head of Bank Support & Business Recovery at Christie + Co, said: “Whilst a voluntary exit is usually preferable our evidence shows that businesses can still attract significant numbers of buyers even when tainted by financial distress, which is often caused by over leveraging.
“Many businesses have already faltered as a result of the tough economic climate, and many more are expected to fall by the wayside over the next six to 12 months. However, as our data shows, distressed assets continue to appeal to experienced operators and those looking to start their first business, with a marked rise in buyers returning to the market during 2010. There also continues to be a number of success stories across our sectors, where operators have sought advice or adapted their offers in line with the changing trading environment.
“The need for expert and up-to-date advice on these markets — the buyers, the sellers and trends — continues to be imperative in order for businesses to be preserved or for new ones to be started in their place.”
Christie + Co is currently marketing a number of businesses for sale across the UK, which would be of interest to a wide range of potential buyers.