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Warehouses can be popular properties for potential buyers who will use them for commercial purposes or even to redevelop the land on which they’re located for other uses. Still, you may find that it is more complicated to find a buyer for this type of property compared to a house or flat. Nevertheless, it’s still possible to get a speedy and fair sale using the tips in this guide.
- Deciding on selling your warehouse
- Information buyers will want about your warehouse
- Preparing your warehouse for sale
- Paying Capital Gains Tax on the sale of a warehouse
- Your options to find a buyer for your warehouse
- Top queries and answers about selling a warehouse
Deciding on selling your warehouse
Depending on where they’re located, according to The Guardian Newspaper, warehouses can be in high demand and offer competitive salaries for workers in areas where the properties are needed for storing the various goods that are sold by major retailers, such as Aldi and Amazon.
Warehouses can be located on industrial parks, outside of villages, in city centres and elsewhere, and by law are properties designated for the unloading and storage of goods. They are usually stand-alone buildings that are not physically connected to any other type of property.
Although many large companies own warehouses, there are also private owners who might have one or two freehold or leasehold warehouses as investment properties either to rent out to companies to use, or hoping that someone might in the future want to make an offer to buy the warehouse and demolish it, then build a different type of property – such as an office block – on the same land.
A freehold warehouse is one where you outright own the land on which the building stands, as well as the property itself. By comparison, with a leasehold warehouse you don’t own the land where it’s located and instead only have ownership of the property for a specified amount of time, in exchange for paying the freeholder a certain amount of ground rent each year.
Regardless of whatever plan a potential buyer might have in mind for your warehouse, there are several important steps to follow when trying to sell the property, including putting together the information that buyers will want to see, and deciding which method to use for selling.
Information buyers will want about your warehouse
Warehouses are commercial properties because they are primarily used for storing business goods, and as a result the typical buyer for a warehouse will want extra information compared to buying a home.
Industry surveys by Savills have shown as recently as 2021 that demand for warehouses continues to soar across the UK, as the number of high street retailers who keep stock on site is dwindling, whilst online retailers are surging in popularity – and these businesses need warehouses for holding their goods.
The location of your warehouse will be a major factor in a buyer’s interest over the property, and you are more likely to interest a potential buyer for whom the warehouse would help make the storage and movement of their goods more efficient, which would boost their business.
But there are many other pieces of information that the buyer might ask you for, and that’s why it can be useful to prepare a buyer’s pack which includes all of these details. The more information that you can provide prospective buyers with, the more you should be able to answer their questions upfront and hopefully increase their interest in your warehouse.
Some of the details that you could be expected to provide include any planning permissions that might exist for the warehouse and the land on which it is located. This will be particularly useful for any buyers that might be thinking of making physical changes to the property.
Another key piece of information could be any commercial Energy Performance Certificate (EPC) grade that you have received for the property, which is a grade that represents the energy efficiency of buildings. The higher the grade, the more energy efficient the property, and some buyers might only be interested in warehouses that have high EPC rankings.
You might also have to provide the details of any asbestos survey done on the warehouse, if that material was used during its construction. Many buyers will want to know about the presence of any asbestos at a property because they might consider it to be a dealbreaker.
Other details that you should likely include in a buyer’s pack for your warehouse include costs that any new owner might face, such as land tax, local business charges, and more.
Preparing your warehouse for sale
When you’re getting ready to sell your warehouse, an important part of the process is making sure that the property looks as attractive as possible to buyers.
This extends beyond the information-gathering that you’ll have to do as outlined in the previous section of this guide. In addition, you’ll want to review whether there are any small or large problems with the warehouse and then decide whether to fix them before trying to sell.
It’s possible that your warehouse could be suffering from any number of physical flaws, such as subsidence, a damaged roof, dry rot and more. The presence of one or more of these problems can cause buyers to view the warehouse as less valuable, particularly as they will be thinking about the extra costs they’ll face as the new owner of the property to correct the work after the sale is completed.
Repairing the work can eliminate the problem, and therefore hopefully make buyers think the warehouse is more valuable and worth a greater offer price. However, you should only pursue this work if you are prepared to spend a fair amount of time and money on the effort.
Note that there are no requirements to fix such flaws before selling, and you can still receive a fair and fast offer for your warehouse "as is" without addressing any physical problems, if you sell to a quick buyer. These companies have extensive experience with making competitive and speedy offers to purchase almost any type of property regardless of any problems it may have.
However, when getting your warehouse ready for sale, you should still pursue some quick and either low-cost or zero-cost steps that can make the property look more valuable to buyers.
These simple steps include fixing any missing roof tiles, replacing any broken windows, taking care of any chipped paint, removing any weeds outside the property, and ensuring that the inside of the warehouse looks as well-maintained and organised as possible for buyers. They will likely look more favourably at warehouses that the owner keeps in good condition.
Paying Capital Gains Tax on the sale of a warehouse
Budgeting the sale of your property is very important, so that you can have a better idea of the various expenses involved with finding a buyer for your warehouse. Your goal when selling any type of property should always be to make a profit, and try to avoid breaking even or selling at a loss.
One of the biggest costs that you could face with the sale of a warehouse can be Capital Gains Tax (read more at the Gov.uk website), which is a levy that the government imposes on the amount of gain, also known as profit, that someone makes when selling an asset, which is a tangible physical valuable item such as a property or car. The tax, if it applies, will only ever be charged on the profit made and will not apply to whatever the final property sale price may be.
Note that there are certain situations in which you might be able to reduce the amount of Capital Gains Tax that you have to pay, so ask as a financial professional for their advice on this.
Your options to find a buyer for your warehouse
When you have followed all the other steps in this guide and are ready to look for a buyer for your warehouse, you’ll next have to decide on which method to use for selling it.
You generally have four options to choose from when selling a property – using a quick buyer, using an estate agent, using an auctioneer, or selling on your own. There are certain advantages that come with each of these selections, but a few of the choices have various disadvantages such as taking a very long time to sell or requiring you to pay large fees.
In order to find the method of selling that is the most suitable for your situation, you should write down the most important factors associated with the sale of you warehouse, such as how long you are willing to wait before securing a buyer, what the ideal sale price of your warehouse might be, and whether you can accept having to pay commission in order to get a sale. Compare all of this information against the details of the four selling methods below, and this should assist you in identifying which of the approaches is the most ideal for your needs.
Using a quick property buyer
Quick property buyers are so called because/ of the speed at which they are able to purchase warehouses, houses, flats, and all other ages, conditions, shapes, sizes and types of freehold and leasehold properties. They can usually complete the purchase of a property in a few short weeks, and that includes exchanging contracts and paying the owner their proceeds.
The reason that cash buyers are able to act so speedily is that they have the cash available to immediately purchase properties. They don’t have to wait for many weeks or months to first get approved for a mortgage to cover the cost of the purchase, which can significantly slow down the process of selling a warehouse.
These companies, such as the London-based LDN Properties, also have the added benefit of never charging any commission when buying warehouses, nursing or care homes or other properties. That means you are assured of receiving the full proceeds from whatever sale price you’re offered.
Also, quick property buyers are happy to purchase “problem” properties that might have issues such as widespread damp, dry rot, asbestos or other issues. They will still make a fast and fair offer for the warehouse even if you sell it “as is” without first resolving the problem, whereas properties with negative issues are sometimes harder to sell via other methods. For example, you may struggle to get decent bids on a “problem” warehouse when selling at an auction.
For your additional peace of mind when selling to a fast buyer, check with individual companies to see if they are registered with The Property Ombudsman (TPO). This is an independent entity that publishes rules to protect property owners against fraud in the fast buying industry, and if a company is a TPO member then they are required to adhere to those rules.
Thankfully, it’s quick, simple and free to find out whether a fast buyer is genuinely a member of TPO. Just visit the entity’s website and look for the “Find a Member” tab on the left side of the main page, then click on it and type in the name of a specific fast property buyer. If they are truly registered with TPO, like LDN Properties, their membership details will appear. Be wary of companies that either refuse to join TPO outright or that claim to be genuine TPO members yet cannot prove this status, because in either situation you might be dealing with a scammer.
Using an estate agent
A second option for selling your warehouse is to enlist the help of an estate agent. They will prepare a listing that describes the property and features photographs of it, and then advertise this in their office, online and in local newspapers. The estate agent will schedule and host viewings to take potential buyers around the property, and field any offers from buyers.
For all of this effort, the typical estate agent will charge you commission usually based on whatever sale price you’re able to get for the warehouse. This fee is taken out of the proceeds immediately once the sale is complete, adding to your costs.
This can be quite a slow way to sell any type of property, particularly if your warehouse suffers from any type of physical flaw or other problem. You should be prepared for waiting up to an entire year or more before you receive a serious offer that is taken through to completion.
To avoid falling for this common trick, you should ask multiple estate agents to give you a free quote for the price at which they think they can sell your warehouse. After that, you should browse property sales websites like Rightmove and Zoopla and write down the current or past sale prices of warehouses similar to yours located in the same neighbourhood. Calculate the average of all these prices and you’ll get a much more accurate estimate of the potential sale price at which you might be able to attract serious offers on your warehouse from buyers.
Using a property auctioneer
A third option for selling your warehouse is trying your luck with an auction, although there is no guarantee that you will receive any bids, which means it will remain unsold and you will have to start over with trying to find a buyer, adding much more time to the selling process.
You will be asked to select a reserve price, which is the lowest value at which you are prepared to sell your warehouse. Always pick a price that will make a profit for you on the sale even after subtracting the fees that the auctioneer will charge, otherwise you risk selling at a loss or only breaking even. Beware that a valid bid on your warehouse at or above the reserve price is a binding transaction and the winning high bidder can sue to enforce the sale if necessary.
This can be a relatively slow method for selling a warehouse, taking at least many months. You will have a delay of several weeks or months between when you first enter the property for sale and when the auction occurs, and then if it does sell you will have another delay whilst the buyer completes all of their required steps to finalise the purchase. Typically, buyers have 28 days for this work, but some auctioneers might set lengthier or shorter deadlines, so always ask.
Some auctioneers might be willing to set a stricter deadline for the buyer to complete their necessary tasks, so it is worth inquiring with individual companies about doing this.
Selling on your own
Finally, you may consider selling the warehouse on your own, which puts all the responsibility on you for every step of the process – developing and advertising a listing for the property, organising and hosting viewings, and fielding offers, ideally taking one to completion.
This is a large amount of time-consuming work and should only be done by someone that has experience of selling properties, otherwise it can become very stressful and overwhelming. It’s not something that you will be able to simply do in your spare time, so only do it if you have such experience, or have an experienced family member or friend who can help for free.
You’ll find that this is on average one of the slowest options for selling a warehouse, and you shouldn’t be surprised if the property remains on the market for more than a full year.
In terms of benefits, the only clear pro of selling with this method is that you will not have to pay an estate agent or auctioneer any commission for finding a buyer. However, that saved expense might be more than offset by the costs involved with selling on your own, such as paying for advertising the warehouse listing online and in local newspapers, and other expenses.
But you can achieve this same zero-commission result yet with none of the stress of selling on your own, if you sell your warehouse to a quick no-fee buyer such as LDN Properties. You will enjoy all the benefits of a fast and commission-free sale and without any stress at all.
Top queries and answers about selling a warehouse
Property owners who are thinking of selling quickly usually have some questions that need answering, ranging from how to tackle urgent repairs before selling through to selling with tenants. Some of the top questions we are asked about selling a warehouse are listed below:
Your top questions when selling a warehouse
Yes, warehouses remain in high demand from online retailers and other companies who need places to store the goods that they sell to customers. Warehouses for sale can be either freehold, where you completely own the building and the land on which it is situated, or leasehold, where you only own the warehouse itself for a set amount of time.
