Selling a Scottish estate when the parts are greater than the whole
A different approach is sometimes required to successfully market a large estate. Simon Brown examines the options.
The past year has seen a marked uplift in the Scottish estate market and in 2015 CKD Galbraith's sporting estate agency department acted in 50% of all Scottish transactions. Interest in the estates we sold was generally widespread with viewers coming from all over the world, confirming our long-held view that the Scottish estate market is truly global.
So what are the options for an estate owner considering selling their property? Some estate owners may feel particularly sentimental when approached with the option of marketing their estate in lots, perhaps due to the fact that it has been passed down through their family over a number of centuries and they feel it is their duty to maintain the estate's legacy for future generations. However, selling in a packaged lots can provide benefits if the estate offerings are not jeopardised in the process.
Of course, every property is different, and the decision to offer it for sale in lots must be carefully assessed at the outset.
Some Scottish estates would not be viable if broken up, but there are a host of reasons why selling in lots or as individual 'packages' may be appropriate.
Buyers may not necessarily wish to take on an estate with multiple houses. Selling in lots can help to generate higher levels of interest, and therefore a higher price, since you are pitching to a larger pool of buyers interested in parts rather than a select group of who may be interested in the whole.
In some cases, sellers would like the option of retaining parts for themselves or members of the family, and offering an estate in lots gives them the chance to achieve this.
In the past, many estate houses/cottages were occupied by estate workers - foresters, masons, farm workers, house staff and so on. This is no longer cost-effective for estate owners, so buyers require fewer properties.
Another factor is that the age profile of buyers nowadays is such that many owners do not live on the estate full-time. People are buying in their fifties and sixties having made their money elsewhere, and are not able to oversee the maintenance of extensive land and buildings in the same way as they might if they lived there full-time or had inherited it earlier in life.
A clear example of a successful sale by dividing an estate into a number of component parts and offering them as entirely separate sales is Kinpurnie Estate, Blairgowrie, Angus. The estate had been formed by the merger of the Kinpurnie estate and the Lundie estate, so it comprised both a principal house and a castle. There were 18 further estate dwellings, eight holiday cottages, 4,228 acres of in hand farmland, 923 acres of commercial forestry, six lochs and a pheasant shoot. There were also further leisure and commercial development opportunities and a portfolio of residential properties which were available in addition to the estate.
It was first brought to the market as an estate in 23 lots with an asking price in excess of £29m, but failed to sell.
When CKD Galbraith became involved we took the view that the estate was more of a collection of individual properties than a genuine estate.
The firm marketed the farms and houses as individual sales in their own right rather than as parts of a larger sale. This tactic allowed us to target the purchasing audience for each particular part rather than relying on buyers to find what they wanted hidden away among the details of a much larger property portfolio. Most of the land, forestry and houses have now been sold and CKD Galbraith is currently working on the sale of the additional property portfolio.
For a property on the scale of Kinpurnie, the original form of the sale caused confusion to the market as the assumption was that a buyer for the entire estate was being sought. Having individual brochures for smaller entities meant potential buyers knew they could negotiate for the particular part they wanted.
As a firm we have taken a flexible approach with the market - if a buyer wanted to buy a slightly different package to what was being advertised this was considered and put to our client. This approach continues to pay off at Kinpurnie with a number of sales secured that did not follow the original suggested package.