Irish distressed auction raises €2.4m and has 91% success rate; Allsop Space has competition.

Yesterday Northern Irish auctioneers Osborne King held a pretty successful auction of some 27 properties in Belfast, an auction which shared many of the characteristics of the three recent Allsop Space auctions on this side of the border – the properties were mostly foreclosed or sold on the instruction of the mortgage lender, the concept of a maximum reserve was adopted to represent a price above which the property would definitely be sold. In summary, of the 27 properties advertised in the Osborne King catalogue, 4 were pre-sold above the maximum reserve before the auction, and of the remaining 23 properties, all but 2 were sold, giving a 91.3% success rate. The auction raised GBP 2.09m (€2.4m) and on average prices achieved were 15% over maximum reserves. Here are the results:

A report from an attendee at the auction said that buyers were a mixture of ordinary folks and professional investors. Developer and Kentucky Fried Chicken entrepreneur Michael Herbert was reportedly there with his wife Lesley and was reported to have made a few bids but didn’t buy anything.

Lot1 is said to have been bought by what was described as the classic developer – stripey pink shirt, tan, big watch. There were plenty of bankers, solicitors and other property professionals along to gawk. The auction was reportedly well-run by Osborne King and they even laid on some nice pastries.

In terms of falls from peak, one of the biggest drops was seen with Lot10 – development land at 112 Comber Road, Ballygowan – which was seemingly originally bought by a developer from Newtownards for £1.7m in 2007. Yesterday it sold to “two lads” for £94k, a 94% haircut. Seems like Northern Ireland has experienced the same collapse in development land values as the Republic, with the latest from Savills being that development land has dropped by 75-90%+ on this side of the border. I’m not even going to attempt an analysis of sold prices here versus prices at the peak in Northern Ireland. As reported on here recently, residential property is down 45% from peak in nominal terms in Northern Ireland, compared with 43% in the Republic as measured by the CSO. In real terms, that is to say accounting for inflation which has been 14% in the UK since 2007 and practically zero in the Republic, then the fall in the Republic is 43% and 52% in Northern Ireland. Sobering.

The two lots that didn’t sell at the auction yesterday were both pubs. According to a recent report by the BBC, “the licensed trade in NI has been badly hit in the recession with a significant number of pubs closing”. Though having said that, some pub chains are generating profits. A NAMA-related pub was destroyed by fire in Coleraine, CountyAntrim two weeks ago.

So overall the auction appears to have been a solid success for Osborne King, and no doubt yesterday’s auction will have improved their prospects for attracting future business, particularly from banks and receivers. The recent Allsop Space auction had a 85% success rate, though that was down from the first two auctions which had 95%+ success rates. Also each of the Allsop Space auctions has seen an average of about 75 lots come under the hammer. And Osborne King might have some way to go to match Allsop Space’s live coverage of auctions with live internet bidding and results.

Lastly, and separately, Wilson Auctions held a major auction last week in Mallusk, just outside Belfast in which 60+ properties came under the hammer. The auction catalogue is here, the results are not yet posted online by Wilsons but this forum appears to have a record of the day’s prices, though you should probably treat these with caution.

UPDATE: 30th September, 2011. The BBC reports on yesterday’s auction.