LONG INCOME MODERN VEHICLE DEALERSHIP INVESTMENT...

GLOUCESTER, MILTON KEYNES & SWINDON

LONG INCOME MODERN VEHICLE DEALERSHIP INVESTMENT PORTFOLIO WITH FIXED UPLIFTS

INVESTMENT PORTFOLIO OVERVIEW

SUMMARY

• Rare opportunity to acquire a portfolio of three modern quality purpose built vehicle dealerships.

• Located within affluent cities and towns in the south of England: Gloucester, Milton Keynes & Swindon.

• All properties are located within established motor retailing locations. • All units are held freehold. • The properties will be let to the strong and established covenant of Johnsons

Cars Limited, who have an Experian Delphi score of 99/100 and a 4A2 Dun and Bradstreet rating.

• Johnsons Cars Limited was incorporated in 1999 and they operate 46 showrooms.

• 20 year FR&I leases, with tenant only break at year 15, subject to 12 months notice.

• Guaranteed rental growth with RPI linked reviews, collared at 1% and capped at 3%.

• Combined rental income of £655,000 per annum exclusive.

THE ASSETS

• Johnsons Volvo Gloucester, Cole Avenue, Gloucester GL2 5ER• Johnsons Honda Milton Keynes, Greyfriars Court, Kingston, Milton Keynes,

MK10 0BN• Johnsons Swindon, Forest Park Road, Mead Way, Swindon SN5 5PQ

PROPOSAL

• We are instructed to seek offers in the region of £10,675,000 (Ten Million, Six Hundred and Seventy Five Thousand Pounds) for the portfolio, equating to a NIY of 5.75% assuming purchasers costs of 6.70%.

• The properties are available as a portfolio, although offers for individual properties will also be considered.

GL2 5ER

SN5 5PQ

MK10 0BN

COLE AVENUE, GLOUCESTER, GLOUCESTERSHIRE, GL2 5ER


LOCATION

The property is located within the affluent city of

Gloucester. At the last Census (2011) the town had a

population of 596,984 inhabitants. Gloucester is located

39 miles north-east of Bristol, 35 miles north-west of

Oxford and 29 miles south of Worcester.

Gloucester is highly accessible benefiting from close

proximity to the M5 Motorway at Junctions 11 and 11a.

The city also benefits from a number of arterial routes

including the A40, which ultimately connects with the

M50 near Ross-on-Wye, the A417 which links with the

south of Worcester and the A38 which links directly to

Bristol.

The property occupies a prominent position fronting

Cole Avenue (A38). The A38 serves the east to west of

the city and links to the A430 which provides access to

the city centre.

The property is located within an established

commercial area and is located within one of the motor

retailing destinations within Gloucester, with Mazda and

Vauxhall opposite and Renault, Ford and Volkswagen all

in close proximity.

Surrounding the property are a number of national

occupiers including Screwfix, Formula One

Autocentres, Euro Car Parks, Pets at Home, Tile Giant,

Wickes, Howdens and Jewsons.

DESCRIPTION

The property comprises a modern, purpose built,

detached vehicle dealership trading with the benefit of a

Volvo franchise. The property is constructed around a

steel portal frame over ground and first floor levels.

The property has been extensively refurbished to

Volvo’s latest global corporate identity and includes

showroom, offices, workshop, parts departments and

valet facilities all on site.

RATEABLE VALUE

The property has a current Rateable Value of £217,000.

EPC

The property has an EPC rating of B-46. A copy can be

made available on request.

SITE AREA

The property benefits from a site area of approximately

1.28 acres.

Use Sq m Sq ft

Showroom 597.75 6,434

Offices 62.69 675

Ancillary 162.60 1,750

Workshop 536.16 5,771

Parts 28.11 303

Valet 51.62 556

Used Car showroom

156.91 1,689

Workshop 374.40 4,030

Ancillary 26.10 281

Parts 179.56 1,933

Stores 24.76 267

Office in used car building

24.76 267

TOTAL 2,225 23,954

Parking Spaces

Display 43

Storage 23

Customer 12

TOTAL 78


subject property

GREY FIARS COURT, KINGSTON, MILTON KEYNES, BUCKINGHAMSHIRE, MK10 0BN


LOCATION

The property is located within Milton Keynes, a large

affluent town within Buckinghamshire. At the last

Census (2011) the town had a population of 229,941

inhabitants. Milton Keynes is located 54 miles north-

west of London, 43 miles north-east of Oxford and 20

miles south-east of Northampton.

Milton Keynes is highly accessible benefiting from

close proximity to the M1 Motorway at Junctions 13

and 14.

The property occupies a prominent position between

the Tongwell and Chaffron Roundabouts and has

visibility to Tongwell Street (A4146).

The property is located within a popular and

established commercial area and within one of the

recognised motor retailing destinations for Milton

Keynes, with Mercedes Benz, Volvo, Skoda and

Volkswagen all adjacent.

The property is in close proximity to the Kingston

Retail Centre, which has a number of national

retailers, restaurants and coffee drive thru’s and is

anchored by a Tesco superstore.

DESCRIPTION

The property comprises a modern, purpose built,

detached vehicle dealership trading with the benefit of

a Honda franchise. The property is constructed

around a steel portal frame and is externally clad in

grey/silver sheet metal cladding, with glazing to the

showroom and first floor.

The property includes a showroom, offices, workshop,

parts department and valet facilities all on site.

RATEABLE VALUE

The property has a current Rateable Value of

£141,000

EPC

The property has an EPC rating of XX. A copy can be

made available on request.

SITE AREA

The property benefits from a site area of

approximately 1.26 acres.

Use Sq m Sq ft

Showroom and offices

445.70 4,797

Showroom ancillary

13.30 143

Workshop 294.10 3,166

Parts and ancillary

49.20 530

Valet 24.80 267

Offices 38.50 414

Stores, plant and ancillary

146.00 1,572

TOTAL 1,011.60 10,889

Parking Spaces

Display 50

Parking and storage 60

TOTAL 110


Kingston Retail Centre

subject property

FOREST PARK ROAD, MEAD WAY, SWINDON, SN5 5PQ


LOCATION

The property is located within Swindon an affluent

town within the south-west of England. At the last

Census (2011) the town had a population of 182,441

inhabitants. Swindon is located 47 miles south-west of

Oxford, 39 miles east of Bristol and 40 miles west of

Reading.

Swindon is a highly accessible town benefiting from

close proximity to the M4 Motorway at Junctions 15

and 16. The town is also accessed by a number of

arterial routes including the A419 which ultimately

connects with Cirencester, and the A420 which links

with Oxford.

The property occupies a prominent position fronting

Mead Way, (B4006). Mead Way is part of a busy ring

road around the town linking with the A419.

The property is located within an established

commercial area and is within one of the motor

retailing destinations within Swindon with Vauxhall,

Skoda and Nissan close by.

DESCRIPTION

The property comprises a purpose built, single storey

detached vehicle dealership constructed in 2012. It

benefits from Mazda, Fiat, Alfa Romeo, Jeep,

Abarth and Fiat Professional franchises.

The property is constructed around a steel portal

frame and is externally clad in charcoal and

grey/silver sheet metal cladding.

The property includes extensive showrooms, with

offices, workshop, parts department and valet facilities

all on site.

It also benefits from a large amount of parking with

approximately 230 parking spaces on site, with over

110 dedicated for display.

RATEABLE VALUE

The property has a current Rateable Value of

£242,000.

EPC

The property has an EPC rating of A-24. A copy can

be made available on request.

SITE AREA

The property benefits from a large site area of

approximately 2.35 acres.

Use Sq m Sq ft

Showroom 795.06 8,558

Office 35.37 381

Ancillary 85.20 917

Workshop 497.63 5,356

Parts 119.86 1,290

Valet 228.76 2,462

Mez Parts 250.90 2,701

TOTAL 2,012.78 21,665

Parking Spaces

Display 112

Storage 67

Customer/MOT 48

TOTAL 227


subject property

TENANCY AND COVENANT

TENANCY

All the properties will be let on new Full and Repairing and Insuring leases with Johnsons

Cars Limited. The leases will be for a term of 20 years from legal completion, with a tenant

only break at year 15, subject to 12 months notice. The rent reviews will be five yearly and

RPI linked, annually compounded, collared at 1% and capped at 3%.

See below a break down of the current rent for the properties:

As it can be seen from the above, the properties are currently reversionary, with sensible

and affordable per sq ft values, particularly given the strong locations of the properties and

their purpose built nature. Please see below some leasehold evidence:

COVENANT

Johnsons Cars Limited (Company Number 3716766) is an independent franchised dealer

group established in 1999. They started out with three dealerships and over the last 20

years have expanded through organic and strategic growth with their established

manufacturer partners. The company is currently ranked 46th in the Motor Trader Top 200

Franchised Dealer Survey (2018).

Recently they have acquired a number of businesses and properties, with the last business

acquisition being TH White in Swindon in 2018.

They represent a number of volume and premium franchises including Lexus, Volvo, Abarth,

Fiat, Ford, Hyundai, Skoda, Volkswagen, Alfa Romeo, Fiat, Honda, Jeep, Mazda, SEAT and

Toyota.

At present they operate 46 showrooms across England from Southport to Slough.

Experian has given Johnsons Cars Limited a Delphi Score of 99/100 and a Delphi Band of

‘very low risk’. In addition , they have a 4A2 Dun and Bradstreet Rating representing a

lower than average risk.

The company has reported the following figures over the last three financial years:

Property Proposed Rent £ PSF

Mazda, Jeep, Alfa, Fiat Abarth,Swindon

£250,000 pa £11.54

Honda, Milton Keynes £155,000 pa £14.23

Volvo, Gloucester £250,000 pa £10.43

TOTAL £655,000 pa £11.59

31.12.2018 (000’s)

31.12.2017 (000’s)

31.12.2016(000’s)

Sales/Turnover £432,442 £360,478 £321,597

Profit before taxes £4,071 £1,448 £2,808

Tangible Net Worth £21,169 £15,431 £26,429

Dealership Rent (£psf)

Volvo, Preston £300,000 (£13.50)

Bentley/ Aston Martin, Cheltenham £261,500 (£11.73)

Mercedes, Swindon £455,000 (£12.68)

Audi, Swindon £509,133 (£13.14)

Volkswagen, Swindon £329,402 (£13.78)

SEAT, Milton Keynes £111,000 (£14.14)

Audi, Milton Keynes £575,000 (£13.52)

Audi, Cheltenham £237,000 (£13.75)

Volvo, Milton Keynes £180,000 (£15.62)

VW/Skoda Milton Keynes £520,000 (£14.61)

AUTOMOTIVE MARKET

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

New Car Registrations

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

9,000,000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Used Car Sales

Despite the recent negative headlines, the automotive sector has remained resilient to the number of current factors affecting the country and other areas of the property industry, such as Brexit, online shopping and the overall demise in high street retailing.

As it can be seen from the graphs opposite, new car registrations have remained consistent. In 2016 we saw the highest year on record for new cars registered. This bubble was eventually going to burst, after a consecutive 6 year increase year on year. However, the reduction from the highest year has not been substantial by any means, with only a decrease of 5.7% in 2017 and 6.8% in 2018. SMMT have predicted a small decrease in 2019, with only 2%, current year to date figures are showing only a 3.5% decrease year on year and therefore it appears SMMT’s predictions will be close.

There are a number of factors which contributed to the decline in vehicle sales. One of the major contributors was the Worldwide Harmonised Light Vehicle Testing Procedure (WLTP) which left dealerships with a lack of stock to provide their customers. Therefore there was a lack in the supply to meet the demands of the customers. In addition, the continued demonization of diesel vehicles caused a lack in consumer confidence, with customers choosing to not purchase a vehicle till government policies were clearer.

An area of the sector which is often left out of the headlines is used car sales. The graph adjacent highlights that much like new cars sales, used sales have remained resilient and since 2016 have been fairly consistent. 2017 figures saw only a 1% decrease form the record high figures in 2016 and similarly 2018 only saw a 3% decrease. Currently 2019 used car sales figures are only showing a 0.6% decrease year to date. It has been noted as well a large number of franchised dealers are now concentrating on used vehicles in response to a slower new car market. This is having the positive, knock-on effect of keeping the remarketing sector particularly competitive.

INVESTMENT TRANSACTIONS

Property Size

(sq ft)

Price/ NIY Date Tenant Comments

Skoda, Bolton 9,472 £2,650,000 / 5.29% Jul 2019 RRG Group Ltd Sale and leaseback of a new Skoda dealership. 20 year term lease, RPI linked 5 yearly rent reviews, collared at 2% and capped at 5% at a rent of £150,000 per annum. With a tenant covenant of 4A2.

Hyundai, Watford 7,693 £3,300,000 / 5.40% Apr 2019 Spire Automotive Ltd 9.75 years With RPI reviews, 2% and 6%

Volkswagen, Tunbridge Wells 23,816 £4,825,000 / 5.75% Jun 2019 VW Group UK Ltd The property had 6 years remaining on the lease, at a rent of £296,000 per annum. The rent reviews were five yearly and to open market.

Jaguar Land Rover, Bristol 73,196 £24,000,000 / 4.43% Dec 2018 Guy Salmon Ltd Off market forward funding, 5 yearly RPI rent reviews, with 20 years left on the lease. Rent of £1,136,000 which equates to £15.52 per sq ft.

Volkswagen, Camberley 8,048 £5,150,000 / 5.25% Dec 2018 VW Group UK Ltd 5 yearly open market reviews, with 7 years left on the lease. The rent is £288,019 per annum.

Volkswagen, Yeovil 22,221 £4,500,000 / 5.17% Nov 2018 Heritage Automotive Ltd

5 yearly RPI rent reviews, with 20 years left on the lease. The rent is £250,000 per annum which equates to £11.25 per sq ft.

Jaguar Land Rover, Huddersfield

58,000 £13,000,000 / 5.0% Aug 2018 Rybrook Vehicles Ltd Forward funding, with 5 yearly RPI linked rent reviews, with 20 yearsleft on the lease. At a rent of £700,000 per annum, which equates to £12.07 per sq ft.

Vauxhall, Newcastle 30,282 £7,000,0000 / 5.58% Aug 2018 Vertu Motors (VMC) Ltd 5 yearly RPI reviews, with 15 years left on the lease. At a rent of £416,514 per annum, which equates to £13.75 per sq ft.

BMW & MINI, Wolverhampton 60,582 £15,000,000 / 4.64% Jun 2018 Rybrook Vehicles Ltd 5 yearly RPI rent reviews, with 20 years left on the lease. At a rent of £750,000 per annum which equates to £12.38 per sq ft.

www.colliers.com/en-gb/uk/services/automotive-and-roadside

PROPOSAL AND CONTACT DETAILS

Disclaimer

Colliers International gives notice that these particulars are set out as a general outline only for the guidance of intending Purchasers or Lessees and do not constitute any part of an offer or contract. Details are given without any responsibility and any intending Purchasers,

Lessees or Third Party should not rely on them as statements or representations of fact, but must satisfy themselves by inspection or otherwise as to the correctness of each of them. No person employed or engaged by Colliers International has any authority to make any

representation or warranty whatsoever in relation to this property. (Insert date) Colliers International is the licensed trading name of Colliers International Business Space UK LLP which is a limited liability partnership registered in England and Wales with registered number

OC385143. Our registered office is at 50 George Street, London W1U 7GA.

FURTHER INFORMATION

For further information please contact the sole agents, Colliers International:

Name: John Roberts Tel: 0121 265 7553Email: [email protected]

Name: Anthony Keohane Tel: 0207 487 1672Email: [email protected]

PROPOSALWe are instructed to seek offers in the region of £10,675,000 (Ten Million, Six Hundred and Seventy-Five Thousand Pounds) for the portfolio equating to a NIY of 5.75% assuming purchasers costs of 6.70%, subject to contract and exclusive of VAT. The properties are available as a portfolio, although offers for individual properties will also be considered.

Name: Tim MeakesTel: 0207 487 1785Email: [email protected]

LONG INCOME MODERN VEHICLE DEALERSHIP INVESTMENT...

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