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Prices to buy a business in Asia are right now at the lowest they will go in many countries and increases in some asking prices may happen as early as next week.

It’s good news for sellers of businesses in Asia. Restaurants, bars, pubs, cafes, hotels and the like, after having their daily trade incomes savaged on and off over the last couple of years due to restricted travel, lockdowns, curfews and trading restrictions, and while watching the value of their businesses plummet, have some good news finally.

Prior to COVID, businesses in Asia were selling for (on average) the equivalent of what the business could reasonably return in profit over a 3 year period. Right now, depending upon location, they are being advertised for between 6 to 12 months return on investment, which is the lowest I have ever seen in my seven years with Asia Business Brokers. Demand for businesses in Asia has always been strong and even so during the pandemic. Sales came to a grinding halt though because international buyers could not travel and local buyers were very uncertain as to how long the economic slump would last.

It normally takes a couple of months’ of data to confirm changes in what a buyer is willing to pay and what a seller is willing to sell for and this is pretty much what a sale value is for a business. In the last few weeks, my company has seen many more buyers who are actually in-country and ready to buy. It has been most encouraging and I’m willing to call it now - I feel certain, barring another crisis, the market has now bottomed. We have already seen this in many countries with the residential real estate market rebounding and although buying businesses is not the same, there are some similarities and it usually lags behind residential real estate.

We are back taking deposits again and setting settlement dates, and already we are receiving calls from some of our sellers asking if it now time to increase their advertised prices.” And the answer to that? The countries where this is more appropriate and most likely to occur are Indonesia, Malaysia, Singapore, Thailand and Vietnam.