How Long Does It Take to Sell a Commercial Property in London?

There is no rigid answer to this question. On average, selling a commercial property in London takes between 6 to 12 months from listing to completion of sale. However, this timeline can be shorter or longer depending on various circumstances specific to location in London, size, pricing, conditions of sale, funding, planning, and so on.

There may be specific requirements for a vendor or purchaser to achieve a sale in a certain time period.

Factors Affecting the Sale Timeline of a Commercial Premises

Property Type and Location

The type of commercial property (whether office, retail, industrial, development, investment, or leisure) and its location play crucial roles in determining how quickly the property sells. Prime locations in central London often attract more interest and can sell faster than properties in less desirable areas.

Even within micro markets of a London Borough, there can be areas that benefit from different levels of buyer demand. For example, a commercial property on a corner plot in the busiest area of Hackney will attract more interest than a side road in Hackney.

Commercial buildings with development potential or various angles (occupier/investment) tend to generate more interest, which can mean buildings sell more quickly.

Market Conditions

The current state of the commercial real estate market significantly impacts sale timescales. In a seller’s market with high demand and strong market sentiment, properties may sell more quickly, while in a buyer’s market might extend the process until completion of sale.

In stronger markets, there are more buyers competing, whereas in a poorer market there will be fewer buyers, resulting in less offers and a longer period of time to achieve a sale.

London has many different commercial property markets for each commercial property sector, and respective areas of London. For example, prime central London trophy assets will appeal to an institutional, high net worth, or international market, whereas suburban London shop investments may appeal to local individuals or SMEs. Those markets will be impacted by market conditions to a different extent, especially where bank funding is required.

Pricing Strategy

Accurately pricing your commercial property is crucial. Overpriced commercial properties tend to stay on the market longer, while competitively priced properties can attract more interest and sell faster.

Logically, the lower the price, the more interest you are likely to generate for a commercial property. An experienced commercial property agent can advise on pricing to fit the commercial property, market conditions, and circumstances of the vendor.

There are many different factors that go into why a commercial property is listed at a certain price, but all things equal, lower relative prices encourage interest, buyers, and a quicker sale.

Property Condition

Well-maintained commercial buildings in good condition are more attractive to buyers and can sell more quickly. Properties requiring significant renovations or with outstanding issues may take longer to sell or bring issues further down the line of a sales process.

The property condition adds an uncertainty and negotiation point between buyers and sellers in a commercial property deal.

Stages of the Commercial Property Sales Process

Preparation (1-4 weeks):

This includes gathering necessary documents, conducting marketing inspections / appraisals, and preparing marketing materials. Essentially, getting the commercial property ready to be marketed.

Marketing (4-20 weeks):

Listing the property and actively marketing it to potential buyers. It can take time to sufficiently expose a commercial property to the market via online platforms, databases, local / national agents, digital campaigns, offline methods, and various marketing channels.

Negotiation (2-6 weeks):

Once offers are received, negotiations begin. This stage can vary greatly in duration and could involve direct negotiations with the vendor, commercial property agents, and buyers.

Due Diligence (4-8 weeks):

The buyer conducts thorough investigations of the property and its financials. This may happen alongside the legal process.

Legal Process (4-8 weeks):

Solicitors handle the legal aspects of the transaction. The commercial legal conveyancing process typically used to take 4-6 weeks, but this tends to take longer in recent times.

Completion (1-2 weeks):

The final stage where funds are transferred, and ownership changes hands.

Tips to Expedite the Sale of a Commercial Property in London

So what can you do to sell a Commercial Property in London quickly and efficiently?

1. Engage Professional Help: Work with experienced commercial property agents who understand the London commercial property market. Engage your commercial solicitor before you start marketing, informing them of your intention to market for sale.
2. Prepare Thoroughly: Gather all necessary documentation related to your commercial property before listing. Buyers will be interested in this, and it helps to qualify offers and achieve the best price.
3. Realistic Pricing: Set a competitive price based on current market conditions and professional advice. This is very important and ensures a sale occurs.
4. Effective Marketing: Utilise a mix of traditional and digital marketing strategies to reach potential buyers. Be creative and patient to allow the marketing to feed through.
5. Be Flexible: Be open to negotiations and willing to consider reasonable offers. Adapt to market conditions.

While the process of selling a commercial property in London can be lengthy, understanding the factors that influence the timeline and being well-prepared can help streamline the process. Each property is unique, and working with experienced professionals can help you navigate the complexities of the commercial real estate market effectively.

We hope this article has been useful to you. If you need to discuss anything about commercial property, please feel free to get in touch.

Greater London Commercial can provide advice when selling your commercial property! Please get in touch to discuss your commercial property.