The determination of an item's true price is often influenced by various factors. In some cases, this is achieved through an auction process, where the final bid determines the item's value.

We saw this happen in a big way with South African artist Vladimir Tretchikoff's famous painting, "Lady from the Orient." When it went up for auction recently, it didn't just sell – it absolutely shattered records, going for an incredible R31,110,000! This wasn't just a sale; it was a huge moment for South African art auction industry.

So, why did "Lady from the Orient" fetch such an eye-watering amount that day? Was it just an old painting? Or was it the thrilling, fast-paced environment of the auction itself that pushed its price so high?

Rainer Stenzhorn from In2assets, a national leader in the commercial and industrial  property auction business, understands this well. "The same applies to real estate," he says. Whether it's a painting or a building, auctions effectively determine real market value.

Think about it this way: Usually, if you're selling something, you pick a price, and buyers might try to haggle. It's often a slow process. But an auction adds one key ingredient: competition. When lots of eager buyers all want the same thing – whether it's a stunning painting or a perfect positioned end-user warehouse – their desire and willingness to pay set the final price.

The Tretchikoff sale involved a famous artwork, characterized by its rarity, high demand, and a setup aimed at securing the most competitive bids. Each bid represented the value someone attributed to it, gradually increasing until the final amount reached R31,110,000. This figure was determined through a competitice live auction process.

It's no different for commercial and industrial properties. Auctions bring together serious investors and companies looking for the right spot. Because everything is out in the open, and people are bidding against each other right then and there, the prices often truly show what the market is willing to pay for that specific property. It cuts out long talks and makes sure the property gets the highest possible value based on real demand.

This is how In2assets broke a record in 2024 for the highest commercial and industrial property transaction in South Africa’s history. 

Next time you hear about a record-breaking auction, remember auctions discover real value. They show that in a competitive setting, the market will always reveal true worth with the tap of a hammer.

<a href="https://www.freepik.com/free-vector/round-auction-isometric-emblem-with-auctioneer-three-men-with-tablets-their-hands-illustration_7252433.htm">Image by macrovector on Freepik</a>