Knight Frank Investment Management (KFIM) has acquired the freehold of three prime car dealerships in Birmingham for its Long Income Property Unit Trust (LIPUT) fund.
The £17million 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, Eddington.
All three are let to Lancaster plc, part of Jardine Motors, on new 20-year leases following Jardine’s acquisition of the majority of the Midlands-based Colliers Motor Group’s business yesterday (8 June).
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.”
Adam 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% per cent is the keenest ever achieved for a dealer covenant outside London.
Bilfinger GVA’s Automotive team advised the vendor Jardine.