Motor Retail Property Bulletin – Autumn 2014

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INVESTORS EXPRESS RISING CONFIDENCE IN CAR DEALERSHIPS

Motor Retail Property Bulletin – Autumn 2014

The investment climate in the first half of 2014 continues to be healthy. The average prime yield is reported to have fallen by 17 basis points over the quarter to stand at 5.7% at the end of the second quarter. Capital values at the ‘All Property’ level increased by 3.8% over the quarter, with 6.8% capital value growth over the year to date.

The closest competitor class for automotive  dealerships is Retail Warehouses. Yields here fell sharply in the second quarter- by an average of 25 bps so far this year. Research shows retail parks at 4.75% net initial  yield with  standalone sites in a range between 5.5% and 7%. By comparison the  automotive  sector has seen dealerships change hands so far in 2014 at an average yield of 6.36%.

The research also reports good levels of liquidity in the market and an expectation that yields will continue to move in over the course of the year.

Investment in auto dealerships over the last decade totals over £1.4 billion spread across the UK.

Figure 1 shows that London and the South of England has been the most active market with  some 43% of the value traded compared with  29% for the North and Scotland and 28% in the Midlands and Wales.

Figure 1

The annual average market size shown in Figure 2 has been circa

£125 million over the last decade in a range between £57 million (2009) and £212 million (2013). 2014 has seen over £135 million in transactions so far and is on target to reach £180 million  by the end of the year.

Figure 2

As might  be expected Greater London shows the  lowest  initial yields over the past decade coming in 60 basis points below the average yield. Lowest prices have been seen in Wales where the ten year average yield was 139 basis points above the average.

Overall Figure 3 shows the South and the Midlands have seen below average yields while the North and Scotland were above average.

Figure 3

Investment activity in 2014, broken down by franchise, shows the premier brands dominating the market with  72% of the transactions by value.

This represents close to £84 million spend out of the £135 million transacted in 2014 so far.

Figure 4 shows the breakdown by franchise.

Figure 4

In the last five years the investment market has been dominated by fund management purchases. This is demonstrable in Figure 5 where fund purchases have moved from 40% of the total value in 2009 to 79% in 2013. So far in 2014 over 90% of purchases by value have been made by Fund Managers.

Figure 5

The counterpoint to this is a fall in investment from occupiers – dealer groups and manufacturers  – from  22% in 2009  to just under 15% in 2013. Occupiers have made just under 5% of purchases so far in 2014.

Currently, the yield profile of automotive dealerships gives scope for compression when compared with many retail warehouse investments. This has not gone unnoticed by fund managers who have spent over £500 million  on this product  over the past five years. All the  while  demand for cars remains strong  – and the prospects look good for the next few years – automotive dealerships are likely to remain attractive investments.

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Motor Retail Property Bulletin – Summer 2014

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Schroder Property adds three Motor Showrooms to its joint venture portfolio

Automotive Property Consultancy advise Schroders on 3 motor dealership investments http://www.schroders.com/staticfiles/Schroders/Sites/global/pdf/Car-Dealership-May-2014.pdf

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Schroder Property is today pleased to announce the acquisition of three separate transactions of modern car dealerships in Yorkshire, Lancashire and Nottingham for the total amount of £8.03 million. All the properties are let to Pendragon Property Holdings Limited.

The properties have been acquired through the Motor Retail Investment Limited Partnership, established in July 2011. The Partnership is a joint venture between Schroder Property Fund and Schroders Multi Manager clients.

Evans Halshaw Vauxhall, Swinemoor Lane, Beverley, Yorkshire HU17 0LJ

Purchased for £1.375 million with a net initial yield of 7.22%.

The property is leased for a term of 30 years from the 2nd November 2001 (17 years unexpired) with 5 yearly upward only rent reviews to market rent. The passing rent is £105,000 per annum (£10.91 psf).

Evans Halshaw Ford, Manchester Road, Ashton under Lyne, Lancashire OL7 0DG

Purchased for £3.755 million with a net initial yield of 6.86%.

The property is leased for a term of 25 years from 30th December 1998 (10 years unexpired) with 5 yearly upward only rent reviews to market rent. The passing rent is £272,515 per annum (£12.55 psf).

Stratstone Land Rover, Tottle Road, Riverside Retail Park, Nottingham NG2 1RT

Purchased for £2.9 million with a net initial yield of 7%.

The property is let to for a term of 20 years from 21st December 2004 (10 years unexpired) on full repairing and insuring basis. The rent is reviewed upward only every 5 years to open market value. The passing rent is £214,967 per annum (£13.88 psf).

James Lass, Fund Manager of Schroder UK Property Fund said:

“This deal reflects our strategy to target areas of the market with resilient rents where income growth is expected to match or exceed inflation, often outside the mainstream office, industrial and retail sectors of the market.”

The vendors were represented by Mathias Perry (Vauxhall, Beverley), Whitmarsh Holt Young (Ford, Ashton Under Lyne) and Torrin Asset Management (Land Rover, Nottingham). The purchasers were advised by Automotive Property Consultancy Ltd.

For further information, please contact:

Estelle Bibby, Senior PR Manager, Schroders

Tel: +44 (0)20 7658 3431 / estelle.bibby@Schroders.com

Note to Editors:

For trade press only.  To view the latest press releases from Schroders go to: http://ir.schroders.com/media

Schroder Property

Schroders has managed property funds since 1971 and currently has £10.6 (€12.8 /US$17.6) billion of gross property assets under management as at 31 December 2013.

Most of the property funds referred to are unauthorised collective investment schemes as defined in the Financial Services and Markets Act 2000. Promotion of these funds is restricted and access to full information about these funds is only available to those exempt from the restriction.

For further information about Schroders’ property business visit http://www.schroderproperty.com

Schroders plc

Schroders is a global asset management company with £262.9 billion (EUR316.0 billion/$435.4 billion) under management as at 31 December 2013.  Our clients are major financial institutions including pension funds, banks and insurance companies, local and public authorities, governments, charities, high net worth individuals and retail investors.

With one of the largest networks of offices of any dedicated asset management company, we operate from 37 offices in 27 countries across Europe, the Americas, Asia and the Middle East. Schroders has developed under stable ownership for over 200 years and long-term thinking governs our approach to investing, building client relationships and growing our business.

Further information about Schroders can be found at http://www.schroders.com.

Issued by Schroder Property Investment Management Limited which is authorised and regulated by the Financial Conduct Authority.  For regular updates by e-mail please register online at http://www.schroders.com for our alerting service.

 

Automotive Property Consultancy – Corporate Brochure

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Automotive Property Consultancy (APC) commenced trading in October 2005 and its reputation, client base and business have grown steadily ever since.

The company’s focus on the franchised dealer market has enabled it to build on it’s sector knowledge and provide clients with a comprehensive and unrivalled motor retail property service, including:

  • Sale and Purchase of dealership land and property for motor retail and alternative use purposes
  • Development and Investment advice
  • Professional Services covering valuation, rent review, lease renewal and Landlord & Tenant matters
  • Property Management and Rating
  • Building, Project Management and Planning advice through consultancy arrangements

We aim to provide clients with the best property service in the motor retail sector. Our results and client list speak for themselves…..

Car Dealership Premises to Let – 26 Stoke Road, Slough, Berkshire, SL2 5AJ

For further details click here: 26stokeroad

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Location
The property is situated immediately north of Slough Town Centre. At the junction of the B416 Stoke Road and Mill Street, in a mainly commercial area.

Description
The property comprises two showrooms, workshop, first floor offices and storage with frontage parking and additional parking to the rear.

Planning
We believe that the premises have the appropriate planning consent for car dealership use but prospective tenants should make their own enquires.

Lease
A sublease is available until 2017. Alternatively a new lease may be available by separate negotiation. Rent upon application.

Rateable Value
£139,000 effective from 1st April 2010.

Energy Performance
Rating C – 65.

Contact
For further information please contact the sole letting agents. An escorted viewing can be arranged solely by appointment with the letting agents. The property can in any event be viewed adequately from the adjoining roads.

Important Notice
Automotive Property Consultancy Ltd for themselves and for the lessors of this property, whose agents they are, give notice that:-
• The particulars are intended to give a fair and substantially correct overall description for the guidance of intending purchasers and do not constitute part of an offer or contract. Prospective purchasers and lessees ought to seek their own professional advice.

• All descriptions, dimensions, areas, reference to condition and necessary permission for use and occupation and other details are given in good faith, and are believed to the correct, but any intending purchaser should not rely on them as statements or representations of fact, but must satisfy themselves by inspection or otherwise as the correctness to each of them.

• No person in the employment of Automotive Property Consultancy Ltd has any authority to give any representations or warranty whatever in relation to this property on behalf of Automotive Property Consultancy Ltd, nor enter into any contract on behalf of the vendor.

• No responsibility can be accepted for any expenses incurred by intending purchasers in inspecting properties which have been sold, let, or withdrawn.

February 2014.

 

2013 Car Dealership Investment – highest level in 10 years

In 2013 APC recorded its highest level of Investment transaction in the Motor Retail market in 10 years!

Acquisition of five Volkswagen-let dealerships for £23.78 million

LaSalle Investment Management have acquired a portfolio of five Volkswagen-let dealerships from DVS Property Ltd.

The portfolio comprises five modern dealerships, three of which are Audi outlets in Chester, Hereford and Stoke, one Volkswagen dealership in Hereford and a Skoda franchise in Cramlington.

All the properties are let to the VW Group for 20 years with five yearly RPI linked uplifts to RPI at a minimum of 2.4% per annum and capped at 3.0% per annum.

The purchase reflected a net initial yield of circa 5.3%.

DVS Property Ltd were represented by Strutt & Parker and the purchasers were advised by the Automotive Property Consultancy and Wilkinson Williams.

For further information click here