Twelve (12) months ago nobody knew where the world was headed with the pandemic.
As a business broker I was worried – “Who’ll have the money to even look at buying a business ?”.
I’m glad to report that scenario could not be further from reality.
A real estate principal in Sydney asked me yesterday where I saw the business selling market right now – this is what I told him.
“There is plenty of money in the economy right now looking for a safe, fairly defensive investment that offers a reasonable rate of return.
Real Estate rent rolls fit this criteria pretty well. None of us knew where we’d be 12 months ago, and who could have predicted the sales numbers being generated today.
Obviously record low interest rates and a lack of listings drives price. As for rent rolls it’s definitely a seller’s market with solid prices/multiples being achieved for quality portfolios.
People were expecting tenants not to be able to pay the rent, vacancies would go through the roof, portfolio’s would de-value, and everyone will want to sell their businesses – none of this has happened.
We’re busy enough working with quality sellers and buyers, but to say there’s a lot of rent rolls on the market is simply untrue.
What has changed is the time wasters and tyre-kickers have left the market – buyers today are genuine, see opportunity, and ready to act.
Its the same story in the wider business selling market – every month we are selling at least one quality business up to $5m enterprise value. Interestingly this month we have sold an engineering business ($1.7m), and a wholesale distribution business ($3.3m) in Brisbane to Sydney and Melbourne buyers.