Selling business premises

gil13

Hi, I wonder if any of you have any thoughts on this:

My brother in law owns a small warehouse approx 3,100 sq ft and has done for over 20 years - all paid for now. There is a neighbouring business that have all the other units on the site and it has got the the point where they would like to get hold of his unit which is at the end of the row and has freehold rights over approaching land. BIL doesnt want to move particuarly but one would have thought that there must be some level of additional premium over the normal market price attached to the neighbour being able to get hold of the entire freehold to the site, its approaches and land, I am guessing it would enhance their own asset having the entire area.

Question really is what sort of premium might reflect the above together with the fact that the move is not of BIL making. How would you negotiate such a scenario? And I would have thought as it is the neighbour who wants this that it would not be unreasonable for BIL to ask for his legal and removal costs to be paid. Plus any hassle factor with change of address, systems, stationary etc etc.

Any thoughts good people?

Wywth

gil13 wrote: »

Hi, I wonder if any of you have any thoughts on this:

My brother in law owns a small warehouse approx 3,100 sq ft and has done for over 20 years - all paid for now. There is a neighbouring business that have all the other units on the site and it has got the the point where they would like to get hold of his unit which is at the end of the row and has freehold rights over approaching land. BIL doesnt want to move particuarly but one would have thought that there must be some level of additional premium over the normal market price attached to the neighbour being able to get hold of the entire freehold to the site, its approaches and land, I am guessing it would enhance their own asset having the entire area.

Question really is what sort of premium might reflect the above together with the fact that the move is not of BIL making. How would you negotiate such a scenario? And I would have thought as it is the neighbour who wants this that it would not be unreasonable for BIL to ask for his legal and removal costs to be paid. Plus any hassle factor with change of address, systems, stationary etc etc.

Any thoughts good people?

Buy & selling is all about what a buyer is prepared to pay and what a seller is prepared to sell for (if at all). There are no premiums.

How much is any other buyer willing to pay?

How much is the neighbour willing to pay?

Is your BIL prepared to sell, and if so at what price?

Mistral001

Perhaps you should see a chartered surveyor who specialises in commercial property. Ultimately it is all about how much the neighbour is willing to pay. However, be careful about inflating the price too much. If the neighbours suspects that it is some sort of ransom deal he might not even buy at any price.

paddyrg

How about getting an appraisal from someone in the commercial property industry what they think the premium would be, then factor in getting the buyer to pay solicitors fees, relocation expenses, etc. If they're game, no problem, if not, it's not worth your BIL's time if he's in no rush. Just sit tight until the other business does want to pay the premium

paulwf

What is the eventual plan the BiL has for the business given it has been running for over 20 years? Would one option be to sell at normal price - releasing capital that can be used now - on the condition of paying a peppercorn rent for a few years until retirement?

This may not be applicable or desirable but just putting it out there as an option to consider.

CKhalvashi

paulwf wrote: »

What is the eventual plan the BiL has for the business given it has been running for over 20 years? Would one option be to sell at normal price - releasing capital that can be used now - on the condition of paying a peppercorn rent for a few years until retirement?

This may not be applicable or desirable but just putting it out there as an option to consider.

Had the business been in a position where it would have been sold, it may be best advising that the value of the business should be taken into consideration, especially if the warehouse is used for something not easily relocatable in business terms (garage, car sales, shop etc)

There are too many where, when and what scenarios here to advise properly.

CK