BMW + VOLVO PRIME AUTOMOTIVE INVESTMENT
INVESTMENT SUMMARY Prime car dealership destination trading under the BMW, Volvo and Sytner Select brands The property occupies a prominent position fronting the A452 Europe Way which links Leamington Spa to the M40 Located on the established Heathcote Industrial Estate, 1.7 miles south east of Warwick, 2.4 miles south of Royal Leamington Spa and three miles north of Junctions 13 and 14 of the M40 Motorway The property comprises three self contained buildings extending to 38,216 sq ft (3,550.4 sq m), occupying a substantial site area of 3.86 acres (1.56 hectares) A low site coverage of circa 25% Let to Sytner Group Limited (D&B 5A1), the UK s leading retailer of prestige and specialist cars, for a further 6.4 years Sytner Group are the second largest dealership group in the United Kingdom A current passing rent of 645,2 per annum ( 16.88 psf) with a minimum guaranteed uplift in Oct 27 to 766,1 pa (effectively 3.5% per annum compounded) Freehold We are instructed to seek offers in excess of 9,000,000 (Nine Million Pounds), reflecting a Net Initial Yield of 6.72% assuming purchaser s costs of 6.68%. This provides an Equivalent Yield of 7.94% and Reversionary Yield of 7.98% (Oct 27).
LOCATION A46 15 A429 Warwick Bypass A4189 A425 Warwick Stratford Road 14 A452 M40 Myton Road A425 Gallows Hill A452 A452 A452 Heathcote Lane SAT NAV: Banbury Road Harbury Lane Royal Leamington Spa Queensway Tachbrook Road Bishop s Tachbrook Warwick is an affluent county town situated between Stratford-upon-Avon and Royal Leamington Spa, approximately 20 miles south east of Birmingham and 97 miles north west of London. Warwick and Leamington Spa have conjoined over the years, and have an estimated total residential population in excess of 8,000. The town benefits from excellent road connectivity with the M40 providing access to Birmingham in the north and London in the south. The M42 provides access to the M6 and the north of England, as well as the M5 and the south west. Rail services to London Marylebone are approximately 1 hour 42 minutes. Due to its proximity to the national motorway network, Warwick is home to many companies headquarters including National Grid, Phillips 66, JET, Bravissimo, Volvo Group UK (Volvo Trucks) and IBM, together with regional headquarters such as Bridgestone, Calor, Kantar and Delphi Automotive. Warwick, Royal Leamington Spa and Stratford-upon-Avon form a highly sought after vehicle retailing market territory, particularly for prestige brands given the excellent demographics. The majority of existing dealerships in the area tend to be compromised either due to age, configuration or lack of prominence. M5 M42 M6TOLL BIRMINGHAM REDDITCH M40 M40 M42 STRATFORD UPON AVON M6 COVENTRY M69 RUGBY M45 M1 13 M40
PRIME AUTOMOTIVE INVESTMENT
SITUATION The property is situated in a prominent position off the A452 roundabout on Europa Way, the principle route from Junctions 13 and 14 of the M40 to the town centres of Warwick and Leamington Spa. The subject property is the most prominent car dealership in the area, with nearby car dealerships including Ford, Peugeot, Renault, Citroen and VW. To the north east is Leamington Shopping Park (135,000 sq ft), the only fashion park in the town and anchored by a 0,600 sq ft Sainsbury s and petrol filling station. Other retailing includes the Shires Retail Park (29,786 sq ft) and Myton Road Retail Park, together with Morrisons, Aldi and Lidl. To the east of the property is mixed use commercial comprising Heathcote Industrial Estate and Tachbrook Park. Major new residential development sites, accessed from Europe Way, Heathcote Lane and Gallows Hill, have been granted planning permission for circa 2,165 new homes; together with schools, retail, leisure and other uses. Gallagher and Barratt Homes have commenced development on the Heathcote Lane site. PRIME AUTOMOTIVE INVESTMENT
SURROUNDING DEVELOPMENT ACTIVITY 735 NEW HOMES, RETAIL AND EDUCATION AMEC 425 NEW HOMES AMEC LEAMINGTON SPA SHOPPING PARK HEATHCOTE INDUSTRIAL ESTATE SHARED ACCESS ROAD TACHBROOK PARK JAGUAR LAND ROVER ACADEMY LEAMINGTON SPA 220 NEW HOMES, GALLAGHER & BARRATT 785 NEW HOMES, RETAIL & EDUCATION GALLAGHER RETIREMENT COMMUNITY
DESCRIPTION The property comprises three purpose built, self-contained car dealerships with customer and display car parking totalling circa 38,216 sq ft (3,550.4 sq m). The buildings are of steel frame construction with fully glazed elevations to the showrooms. Internally, each building provides showroom, offices, workshop and ancillary accommodation. There are electric charging points and a car wash to the rear of Unit 1. Unit 1 is occupied by Rybrook BMW, Unit 2 is occupied by Sytner Volvo and Unit 3 trades as Sytner Specialist Cars. Units 2 and 3 are accessed through a security barrier.
PRIME AUTOMOTIVE INVESTMENT
ACCOMMODATION We have measured the property in accordance with the RICS Code of Measuring Practice (Sixth Edition) to provide the following approximate gross internal areas (GIA): ACCOMMODATION SQ M SQ FT BMW Ground Floor Showroom, Offices and Ancillary 923.8 9,943 Ground Floor Workshop and Storage 897.8 9,664 First Floor Offices and Ancillary 213.7 2,300 Sub Total 25.3 21,9 VOLVO Ground Floor Showroom, Offices and Ancillary 731.9 7,878 Ground Floor Workshop and Storage 352.7 3,796 First Floor Offices and Ancillary 83.2 896 Sub Total 1,167.8 12,570 SYTNER SELECT Ground Floor Showroom, Offices and Ancillary 218.0 2,347 Ground Floor Workshop and Storage 26.5 285 First Floor Offices and Ancillary 2.8 1,1 Sub Total 347.3 3,739 Total 3,550.4 38,216 The total site area is 3.86 acres (1.56 hectares) providing a low site coverage of approximately 25%. ACCESSED FROM HEATHCOTE LANE SUBLET TO RYBROOK LTD
TENURE The site is held Freehold. TENANCY The property is let in its entirety to Sytner Group Limited on a 25 year lease from 30 October 1997, on Full Repairing and Insuring terms. The passing rent is currently 645,2 per annum ( 16.88 psf) and is subject to reviews every five years, the next being 30th October 27. At review the rent is subject to a minimum increase to the higher of open market value of the whole or permitted parts or a multiplier of 1.1877 (effectively 3.5% per annum compounded). The rent will therefore increase to a minimum of 766,1 per annum ( 20. psf) in 27. Unit 1 has been sublet to Rybrook Limited on a lease expiring 15th October 22. The lease is drafted on the same principle terms as the Head Lease. The passing rent is 393,715 per annum ( 17.97 psf) and is subject to identical review provisions as the Head Lease. The rent will therefore increase to a minimum of 467,621 per annum ( 21.35 psf) in 27.
BMW + VOLVO COVENANT STATUS SYTNER GROUP LIMITED (Company Number 2883766) Sytner Group, the UK s largest Prestige Motor Dealer, was founded in 1968 and has grown to encompass 19 of the world s most desirable car manufacturers in over 140 dealerships throughout the UK. Historically the Group solely operated BMW dealerships, having opened their first in Nottingham in 1970, before expanding to BMW Leicester and BMW Sheffield. After many years working exclusively with BMW, the Group diversified to represent other prestige marques. By 1997 the dealership count had reached double figures and included brands such as Ferrari, Audi, Mercedes-Benz, Land Rover and Porsche. Later that year, the company floated on the Stock Market and became Sytner Group PLC, enabling it to grow further throughout the UK. For the financial year ending December 24, the tenant company (Sytner Group Limited) reported turnover of 3,665,451,000 and a pre-tax profit of 81,393,000. The tenant has a Dun and Bradstreet rating of 5A1. Provided below is a summary of the tenant s most recent financial performance: Financial Year End Turnover In 20, Sytner Group was acquired by the American-based motor retailer, Penske Automotive Group, the second largest publicly traded automotive retailer in the United States employing over 22,000 people worldwide. Consequently, the Group delisted from the London Stock Exchange and today, Sytner employs almost 7,000 people and has achieved a top five position in the Sunday Times Best Big Companies to Work For for six consecutive years. In 25, the Group finished second overall and was awarded a coveted Three Star Award for the third year running. 31 Dec 24 31 Dec 23 31 Dec 22 3,665,451,000 3,220,886,000 2,967,5,000 Profit 81,393,000 64,660,000 54,6,000 Net Worth 87,7,000 97,0,000 4,399,000 Trade Parts Specialists
PRIME AUTOMOTIVE INVESTMENT
UK AUTOMOTIVE INDUSTRY OCCUPATIONAL The UK and European dealership occupational market continued to strengthen throughout 25 and Q1 26. Institutional and private equity firms demonstrated a strong appetite to invest in the sector. This is largely due to the secure income profile offered by the tenants, together with the ability to secure guaranteed rental uplifts through the terms of the leases. New car registrations in the UK grew 2.0% in April 26 to 189,5 units, according to the Society of Motor Manufacturers and Traders (SMMT). The largest growth sectors were that of fleet and business, whilst registrations of alternative fuel vehicles rose 26.8%, in line with the year so far. This continued growth has given dealers the confidence to invest and grow their businesses. There has been a transition from growth through acquiring other businesses to investing in their portfolios, and further consolidation is forecast to be a feature of the market going forward. TOP UK DEALER NETWORKS Manufacturers and dealer network groups continue to improve their portfolios through redevelopment and relocation. Dealers are under increasing pressure to upgrade their portfolios to comply with the manufacturers corporate image requirements and accommodate increasingly larger model ranges. Rank Name Turnover Year 1 Pendragon 4,453,900,000 25 2 Sytner Group 3,665,451,000 24 3 Lookers 3,649,0,000 25 4 Arnold Clark Automobiles 3,265,412,000 24 5 Inchcape Retail 2,662,400,000 25 6 Vertu Motors 2,4,912,000 24 7 Mercedes-Benz Retail Group 1,734,1,000 24 8 Jardine Motors Group 1,528,657,000 24 9 TrustFord 1,441,278,000 24 Marshall Motor Group 1,232,761,000 25 Source: Automotive Management Online
UK AUTOMOTIVE INDUSTRY INVESTMENT The UK and European dealership investment market also continued to strengthen throughout 25 and Q1 26. Institutional and private equity firms demonstrated a strong appetite to invest in the sector, attracted by the secure income profiles with long leases let to manufacturers or dealer network groups, together with the prevalence of guaranteed rental uplifts in many leases. Manufacturers and dealer network groups continue to drive yields on prime stock achieving Net Initial Yields as low as 4.5% for best in class. In many instances, recent transactions have attracted strong interest resulting in purchase prices ahead of asking levels. With the limited supply of stock currently available, the market is forecast to sustain the strong investor demand, from both experienced institutions and private equity, together with new investors diversifying from other sectors. We set out recent comparable investment transactions opposite: Date Apr 16 Glaze Portfolio (Hull, Bradford, Mansfield & York) Tenant (D&B Rating) Pendragon Property Holdings Ltd (2A1), Cars 2 Ltd (2A2) & Albert Farnell Ltd (4A1) Price 26,350,000 On the market Net Initial Yield Term Certain 6.00% 12.8 years Reviews Apr 16 Carbase, Bristol Brent Cars Ltd (2A3) 4,475,000 6.30% 19 years RPI Mar 16 Ford Commercial, Dagenham Feb 16 Ford, Birmingham OMV / Fixed Annual Ford Retail Ltd (5A3) 6,620,000 4.57% 15 years RPI Bristol Street First s Ltd (5A1) 4,800,000 6.40%.7 years OMV Jan 16 Nissan, Bristol Nissan Motor (GB) Ltd (5A1) 6,5,000 4.58% 20 years OMV / RPI Dec 15 Oct 15 Jul 15 Mill Volvo, Sunderland Mini Harrogate BMW / Mini, Tring Sub-let to Mill Garages North East Ltd from Inchcape Estates Ltd (5A1) Pendragon Property Holdings Ltd (Pendragon PLC) (2A1) Specialist Cars Ltd (Specialist Cars Holdings Ltd & Specialist Cars Ltd) (2A2) / Malthurst (5A1) 1,700,000 6.17% 7 years OMV 1,920,000 5.20% 9.7 years Fixed Annual 7,620,000 4.85% 19.5 years RPI Jun 15 VW, Shrewsbury Volkswagen Group UK Ltd (5A1) 5,176,000 5.75% 13.6 years OMV Jun 15 Renault, Bolton Renault UK Ltd (5A1) 4,000,000 6.25% 6.7 years OMV Dec 14 VW, Cheltenham Volkswagen Group UK Ltd (5A1) 3,915,000 6.16% years OMV Dec 14 Ford, Staines Ford Retail Ltd (Ford Retail Group Ltd) (5A3) 4,500,000 6.30% years OMV
VAT EPC PROPOSAL The property has been elected for VAT and it is anticipated that the transaction will be treated as a TOGC. Energy Performance Certificates are available upon request. We are instructed to seek offers in excess of 9,000,000 (Nine Million Pounds). A purchase at this level would reflect a Net Initial Yield of 6.72%, assuming purchaser s costs of 6.68%. This provides an Equivalent Yield of 7.94% and a Reversionary Yield of 7.98% (Oct 27). FURTHER INFORMATION Jonny Doulton 0 7255 89 jonny.doulton@rapleys.com Martin Carey 0 7255 85 martin.carey@rapleys.com Rebecca James 0 7255 80 rebecca.james@rapleys.com Rapleys LLP is registered as a Limited Liability Partnership in England and Wales. Registration No: OC33. Registered Office at Falcon Road, Hinchingbrooke Business Park, HUNTINGDON PE29 6FG. A full list of Members is available on our website or at any of our offices during normal business hours. Rapleys LLP operates an Environmental Management System which complies with the requirements of ISO 140:20. Regulated by RICS. Any maps are for identification purposes only and should not be relied upon for accuracy. Reproduced by permission of Geographers A-Z Map Co. Ltd. Licence No. A. This product includes mapping data licensed from Ordnance Survey - Crown Copyright 20. Licence No. 073 and Crown Copyright. All rights reserved. Licence No. ES 9. Misrepresentation Act: These particulars are produced in good faith and believed to be correct. Neither Rapleys, their joint agents (where applicable) or their client guarantees their accuracy and they are not intended to form any part of a contract. No person in the employment of Rapleys or their joint agents has authority to give any representation or warranty in respect of this property. All prices or rents are quoted exclusive of VAT. June 26. Design by carve-design.co.uk 12397.