After years of low activity, the plant and machinery market has come roaring back to life. This specialised sector of chartered surveying generally involves experts working alongside estate agency colleagues who are selling buildings. If a property or business cannot be sold as a going concern, then the building, and the plant and machinery are sold separately. The sector usually rebounds in periods of economic downturn, and the pandemic, rising interest rates and war in Ukraine have combined to spark insolvency in certain areas.
I spoke with industry expert Robert McKay, managing director of McKay and Associates, and he told me that the market reignited from Q3 of last year.
The first major sign of looming insolvencies in 2022 was when construction contractors Roadbridge went into receivership. Irish building contractors were among many worldwide purchasers who bought hundreds of lots including excavators, generators and site cabins. Robert McKay carried out several recovery valuations for banks and told me that the lots made very good prices, in some cases approaching new values, as there were long delays in the supply of new plant in the market.
Subsequent instructions where Mr McKay handled both valuations and sales included the disposal following the retirement of the owners of Branagan Meats in Ballycoolin, Dublin 15. Again the plant and food processing machinery achieved strong prices because of delays in the supply of new equipment, and the property has since been sold by Savills.
Plant and food processing machinery achieved strong prices
Insolvency sales completed already this year by Robert McKay include Pro-Duct Ventilation Ltd (IPL) at Western Industrial Estate, Dublin 12 and the liquidation of ACB Group Design and Construct Ltd (IPL) which manufactured industrial roofing panels from a factory in Ballyjamesduff, Co Cavan.
With online auctions well established in the property business, it’s notable that the plant and machinery sector led the way in introducing online bidding over 20 years ago.
Mr McKay told me that online auctions are increasingly successful, and open up the global market, with many lots being exported. The platform incorporates a bidder authentication process which maximises compliance and trust and once a sale is uploaded, bids can be made 24/7.
The system is fully automated and has a buyer database that increases with each sale
“Buyers are afforded a fair opportunity of success as bidding only terminates after 10 minutes of inactivity, which in turn maximises the amount achieved,” Mr McKay told me.
“The system is fully automated and has a buyer database that increases with each sale. Recent additions include geo-location targeting and smart lotting tools which automatically allocate multiple images to lot descriptions on the internet. Participating in an online auction, especially near to the time when lots are closing, has a similar buzz to a live onsite auction and saves interested buyers the cost and time of travelling to the event,” he said.
Not surprisingly, “sustainability” has become a big factor in the market and should be of particular interest to purchasers and bankers.
The market, and valuers, are increasingly alert to issues such as Environmental Social Governance, with an emphasis on decarbonising, reduction of emissions and recycling, with a particular emphasis on what is known as “stranded assets”.
Stranded assets are those that due to technological advancement, together with regulatory changes and the drive towards net zero emissions, may see no demand in the marketplace with values possibly impaired to recycling worth.
Examples might be oil and petrol installations, coal-fired power plants and diesel vehicles, given the move to introduce electric vehicles in industry.