The digital disruption facing the real estate industry has taken another step forward with the launch of what could be the world’s first commercial property online agent. Following in the footsteps of UK startups such as Purplebricks and eMoov, Virtual Commercial provides commercial property vendors with all the tools they need to sell online for as little as £300. Co-Founder and CEO, Andrew Vertes, tells us more:
Are you the world’s first online commercial agent?
Yes, we believe Virtual Commercial is definitely the UK’s first, if not the world’s first, dedicated online commercial estate agent. We provide the tools and support of a traditional agent to allow anyone to sell or let their commercial property throughout England & Wales. All for a low, fixed cost with no commission fee charged.
Was this inspired by residential online agents?
Absolutely. Having worked in commercial property agency for many years, I had witnessed the way the internet was changing how commercial property was being marketed and searched for. At the same time, the rapid success of online residential agencies (eg. Yopa) proved that sellers are happy to take control of the process.
What type of properties do you target? Is it everything from the local grocery store to a large office building?
As this has been built from the ground up for commercial property, we are able to handle any type of commercial property or business disposal. Whether a sale or a letting and from your local high street shop through to a large multi-let office building, we can deal with every use and every type of disposal.
What do the traditional agents think of this?
As we are the first movers in this market, we believe we will be closely watched. Having met some senior individuals within the established traditional firms, the consensus is that they have been waiting for someone to make the move into this market and are surprised it has taken so long.
What is the background of you and the team?
I have worked in commercial property my whole life. I ran the commercial agency department and was a director of a successful central London property company. I then left and set up my own management and agency consultancy, then came up with this idea and realised I had to make it happen.
I spoke with a good friend Laurence Herzberg who had recently helped launch a property portal in the Balearic Islands to see what would be required to make this happen. He introduced me to our third co-founder Aron Maus, who also had experience with launching his own start up trading in precious metals.
What are the biggest challenges in growing the business?
We launched at the beginning of June, about the same time as Brexit. Without a doubt this has affected market confidence. We initially launched with a single sales model based on a 12 month term but we found prospective clients now have the concern of negativity surrounding commercial and the future. Understandably clients had concerns about paying for a fixed marketing term if the economy is about to plunge into a recession (although that has largely been seen to be unfounded). We have dealt with this by changing and improving our pricing options to include the following:
1. Unlimited marketing term
2. On-completion pack
3. 3 month marketing term
Do you have outside investment or are you planning to raise capital?
Yes, we were fortunate enough to raise investment for the business. I think our successful raise was really down to our team of co-founders, having a detailed business plan, financial forecasting and a working product. Because we believed in the concept we decided to self-fund the development of the platform prior to raising capital. This meant that investors could use our platform and see for themselves what we were building. We ended up getting investment from multiple investors at our target valuation. However, it was by no means easy.
What has the market response been like generally? Any surprises or as expected?
As mentioned, launching in the Brexit aftermath has been an unforeseen and surprising challenge. We initially launched with a flurry of enquiries from interested users, however, post Brexit, many previously interested parties are now questioning whether it is the right time to sell. Those users who have completed a purchase have been really positive about our website, support and the lead management process.
Do you think this is different in any way to the residential concept? (eg. vendors may see agents are more valuable for commercial assets?)
There are obviously similarities between the two but there are also significant differences and far more complications and challenges with commercial property, whether using a traditional estate agent or an on-line agent. However this is why we offer Agent Support for all our clients, should they have a question or need advice, we are here to help.
Can you give a case study of a property sold via the platform?
We have only been active a short while but one of our first clients is a critically acclaimed and award winning restaurant in a beautiful medieval town in Dunster, Somerset. The restaurant is Reeves Restaurant, the freehold sale of which includes a 40 cover restaurant, outside space and accommodation. The current owner had previously used a traditional estate agent to market the property but he found that the agent actually had very little involvement in the sale beyond listing the property on-line and interested parties preferred dealing directly with him rather than the agent. However, the agent still insisted on a traditionally large commission fee based on the sale value! As a result, he engaged Virtual Commercial to assist in the sale of his asset.