Birmingham property community active on multi-million car retail deal

BIRMINGHAM’s commercial property advisers have played a crucial role in helping to deliver a £17m deal in the West Midlands’ car retail sector.

The takeover of Colliers Group by Essex-based Jardine Motors was confirmed earlier this month in a move designed to capitalise on the popularity of Jaguar and Land Rover models.

Knight Frank Investment Management (KFIM) acquired the freehold on three of the Colliers sites in Birmingham on behalf of its Long Income Property Unit Trust (LIPUT) fund.

The £17m acquisition includes a six-acre site and the recently completed purpose-built Land Rover, Honda and Mazda showrooms – comprising a total of 70,629 sq ft – on Tyburn Road, Erdington.

All three are let to Lancaster, part of Jardine Motors, on new 20-year leases.

The sale and leaseback deal was brokered by Knight Frank’s Birmingham-based specialist automotive team.

According to Adam Chapman, who heads the national team, it is the largest car dealership investment to transact this year to date, and the first new generation Land Rover facility to be traded in the investment market worldwide.

Matthew McDonald, fund manager for LIPUT, said: “We had to act quickly and efficiently to complete this transaction. In addition to the very high quality of the underlying real estate, the opportunity to influence the lease terms to match the fund strategy has provided the opportunity to enhance future income performance.”

Mr Chapman said: “Opportunities of this quality are rare. The transaction demonstrates the continued strong demand from institutional investors for prime automotive stock, and also an emerging trend that the very best assets are increasingly being traded in ‘off market’ transactions.”

According to Mr Chapman, the yield of sub 5% is the keenest ever achieved for a dealer covenant outside London.

Bilfinger GVA’s Automotive team advised Jardine.