PRIME CAR SHOWROOM INVESTMENT PO19 8TX PO19 •

CHICHESTER

TERMINUS ROAD • TERMINUS ROAD Volkswagen A3

West Marden Investment Summary. Location.Finchdean Singleton A3(M)

Walderton Binderton

Eartham Situated in Chichester’s Located off the A27, the main primary car retail and trade arterial route along the South location, 2 miles south west East Coast running between West Ashling of the city centre and 15 miles Portsmouth to the west and A27 A27 east of Portsmouth Brighton 3.1 miles to the east Southbourne A27 A27 Chichester Westergate Large showroom Floor Area: 26,210 sq ft A250 Barnham 39 display bays (111 total bays) Site Cover: 1.00 acres Parts storage and showroom to Colworth (28% site coverage) the rear

Bindham Single let to Peter Cooper AWULT: 13.1 yrs (to expiry) Motor Group Limited Bognor Regis

Marketing Rent: 5 yearly rent reviews to OMR £ £160,000 pa (£5.03 psf)

Tenure: Long Leasehold (2 leases both with 129 years New trade counter scheme in unexpired at £6,337.34 pa close proximity (Ravenna Point) subject to review)

Proposal

We are instructed to seek offers for the freehold interest in excess of £2,020,000 subject to contract and exclusive of VAT. A purchase at this level would refl ect an attractiveNet Initial Yield of 7.25% and a low capital value of £77 per sq ft, after deducting purchasers costs of 6.28%. Site Plan. Site

*boundary for indicative purposes only

2 VOLKSWAGEN • TERMINUS ROAD, CHICHESTER, PO19 8TX Local Occupiers. University of 1. Ford 11. Dairy Crest Chichester 2. Jaguar / Land Rover / Aston 12. Motoforce CHICHESTER Chichester Southern Gateway Martin 13. R&D Motors MOT, Chichester TOWN CENTRE Regeneration of 30 acres of 3. Gemini Data Loggers Tyre & Brake Centre brownfi eld sites 4. St Wilfred’s Hospice Furniture 14. Enterprise Rent a Car Outlet 15. Skoda CHICHESTER 5. West Fire & Rescue 16. Sentry Self Storage Technical Support Centre STATION 17. Deltex Medical 6. Jewson 21 18. Loc’n Store 7. The Tread Shop 19. Tesco 8. Premier Inn, Cineworld, Ten Pin 20. Chichester Enterprise Centre 8 9. Princes 21. Waitrose 9 10. Milk & More Delivery Hub 22. Ravenna Point Trade Scheme A259 7 6 11 10 14 13 4 5 12 3 22 15 16 2 TO BRIGHTON 20 18 1 TERMINUS ROAD

17 19 A27 Outline Planning Application for 9 warehouse units CHICHESTER BYPASS (18/01126/OUT)

TO PORTSMOUTH

VOLKSWAGEN • TERMINUS ROAD, CHICHESTER, PO19 8TX 3 Tenancy Information.

Total Area Lease Lease Break Next Rent review Contracted Contracted Property Tenant Name Sq Ft Start Expiry Option Review mechanism Rent pa Rent psf*

Volkswagen Peter Cooper OMR Terminus Road, Chichester, 26,210 17-Apr-2012 16-Apr-2032 25-Mar-2027 25-Mar-2022 £160,000 £5.03 5 yearly PO19 8TX Motor Group Limited

*Rent psf apportioned on the basis that external car display bays and compounds are rentalised separately. Rental breakdown available on request.

Rent Review Provision. Covenant. Accommodation.

Rent is reviewed every 5 years, with the next review in March Peter Cooper Motor Group Limited (D&B Rating 2A2), is The building has been measured in accordance 2022, and is calculated as the higher of the rent payable one of the leading Volkswagen experts on the South Coast. with the RICS Code of Measuring Practice (Sixth immediately prior to the next review data or the rack rental Edition) and provides the following Gross Internal value of the premises on the next review date. A Financial Summary for Peter Cooper Motor Group Areas: Limited is set out below:

Accommodation Sq M Sq Ft PETER COOPER 31-Dec-15 31-Dec-16 31-Dec-17 Franchise Information. MOTOR GROUP LTD GROUND FLOOR:

TURNOVER £74,835,558 £76,862,471 £83,951,150 Showroom, Sales Offices & Volkswagen Passenger Cars is part of the Volkswagen Group 656 7,065 (also known as Volkswagen AG), a holding company for 12 twelve Ancillary Areas PROFIT /(LOSS) £264,912 -£553,776 -£56,658,000 brands from 7 European countries, including Audi, Porsche, BEFORE TAX Workshops & Ancillary Areas 486 5,228 Bentley, Bugatti, Lamborghini and Ducati. In the UK, Volkswagen TANGIBLE NET £2,554,525 £2,077,592 £1,982,545 WORTH FIRST FLOOR: has a market share of 8.6% (Dec 2018), an increase on the 2017 figure of 8.2%. In 2018 they sold 203,133 new cars and are ranked Office Areas 182 1,965 2nd in terms of market share. Ancillary & Car Deck 1,111 11,952

The Volkswagen Golf was the 2nd best-selling car of 2018 with 64,829 TOTAL GIA 2,435 26,210 new registrations, whilst the Volkswagen Polo was the UK’s 6th best-selling with 45,149 new registrations. With the growing Display Parking 39 demand for zero emission travel, Volkswagen has developed the Customer & Additional Parking 72 electric e-Golf, due for release in 2019. Volkswagen Group have also committed to investing £30 billion into technology including TOTAL PARKING 111 SPACES electric vehicles and autonomous driving systems over the next 5 years.

4 VOLKSWAGEN • TERMINUS ROAD, CHICHESTER, PO19 8TX Nearby ADULT CATCHMENT POPULATION

Dealerships. 5 MILES 60,000 A27 Shopwhyke 10 MILES FRANCHISE - DEALER Terminus Road Industrial Estate Industrial Estate 200,000 A27

1. Aston Martin & Jaguar - Harwoods Partfield % OF TOTAL POPULATION CHICHESTER Retail Park EARNING £20,000+ PA 2. Citroen, Toyota, Mazda, 8 Peugeot - Snows 2 (AGE 18+ YEARS) 3 1 Quarry Lane 3. Ford - Hendy Industrial Estate A27 5 MILES 4. Honda- Yeomans A259 50% 6 5. Kia - Slated Barn 10 MILES 44% 6. Mercedes - Marshall 4 7. Nissan - Yeomans Part Field Industrial Estate 8. Skoda - Azur DRIVE TIME TO NEAREST TOWNS / CITIES

7 15 MINUTES PORTSMOUTH (14 MILES)

25 MINUTES PETERSFIELD BOGNOR (17 MILES) 5 REGIS 30 MINUTES WORTHING (17 MILES)

45 MINUTES SOUTHAMPTON (35 MILES)

1 HOUR BRIGHTON (31 MILES)

1 HOUR CRAWLEY (40 MILES) Automotive Market Commentary. THE BREAKDOWN OF UK CARS ON THE ROAD BY CAR AGE (2018)

7 years old + The UK used car market remains strong with 7.61 million vehicles sold in 2018. Although the number of used car sales showed a small decline of 2.2% year-on-year, the used car market remains approximately 3.2 times the size of the new car market.

New car sales were marginally down in 2018 as a result of the lack of supply from 4-6 years old manufacturers which were hindered by the introduction of Worldwide Harmonised Light Vehicle Test Procedure. Despite the prevailing supply constraints, there were still 2.37 million new vehicle registrations in 2018 which is above the 10 year average of 2.35 million. Less than 3 years old The recent strong sales figures have been driven by increased petrol car sales (up 9% y-o-y), and Alternative Fuel Vehicle (AFV) sales (up 21% y-o-y). Registrations of AFVs have increased by 290% since 2015, highlighting their popularity amongst consumers 0% 10% 20% 30% 40% 60% which is pushing manufacturers to continually advance their technologies. There are 40 plug-in electric vehicles (EVs) now available in the UK market, with a further 20 due in 2019 alone.

The drive for greener vehicles alongside regulatory change has instigated a structural Some dealerships are looking to reposition their properties by proactively rolling out shift in the automotive market. The majority of manufacturers now expect that a enhanced and consumer focussed aftersales services. The main determinant of this quarter of sales will be from EVs by 2023, as emphasised by average waiting times market is the number of vehicles on the road, which has risen 0.9% over 2018 to 34.6 with orders for a new factory ordered cars now taking 10-12 weeks, whilst wait times million vehicles. for EVs are often reported to be in excess of 6 months. The graph highlights that in 2018, 79% of cars on the road in the UK were over 4 years old. This underpins the strong demand for servicing, maintenance and repair, which continues to remain robust for safety, economic and performance reasons. Furthermore, this provides an opportunity for dealerships to expand and innovate their aftersales offering, and it is widely anticipated that automotive retailers will need to adopt these changers in order to maintain their respective market share.

There is a distinction between the manufacturer and distributor sides of the UK motor industry which is particularly important in light of some recent notable manufacturing relocations and Brexit related noise. Not all the recent UK manufacturing relocations are Brexit related, with Honda’s recently relocating to Japan in order to better serve the larger Asian and US markets that account for 95% of their global sales. This is unsurprising as 80% of cars made in the UK are exported to over 160 different markets.

In comparison, the UK car dealer market is in robust health. Car pricing will be influenced by trade tariffs but to a large extent this impact will be softened by the prevailing low interest rate environment which funds up to 90% of new car and 50% of used cars purchases. Amidst all this activity the car dealership remains central to the delivery of the evolving product and represents the key point of contact with customers with 79% of motorists buying their most recent car from a dealership.

6 VOLKSWAGEN • TERMINUS ROAD, CHICHESTER, PO19 8TX The Automotive Investment Market. THE EVOLUTION OF CAR SHOWROOM INVESTMENTS

2013 2018

Automotive property has been an ever-growing and attractive asset class for investors who are often Average Rent £ psf £13.55 psf £14.14 psf attracted by prominent, well connected real estate with substantial unexpired lease terms to robust covenants who have incurred considerable expenditure on the assets. Average Rent Overall £310,609 pa £335,415 pa The automotive market has consolidated over the past 10 years following a flurry of M&A activity. Average Yield 6.46% 5.55% Simultaneously, brands have continued to demand bigger facilities and dealerships to house their widening range of vehicles and to support the growing aftersales revenue streams. Prime Yield 4.98% 3.98% The growing investor interest in the automotive sector has resulted in the car dealership market Average Unexpired Lease Term 17.1 yrs 12.5 yrs achieving investment volumes of £311 million in 2018, which is the second highest annual figure on record behind the £494 million recorded in 2014. Excluding 2014, investment volumes in 2018 represent Average Lot Size £4,764,109 £6,221,200 almost a fifth of total investment into car dealerships over the past 10 years. In recent years the market has been buoyed by increasing numbers of specialist investment funds and Average SQ FT 23,279 sq ft 24,297 sqft property companies focusing on automotive investment opportunities. As the weight of money being Average Site Density 26% 34% drawn to car dealership investments has increased, yields have compressed over the past 5 years (see table), with both average and prime yields decreasing by c. 100 bps. This has pushed average lot sizes % of RPI Transactions 77% 62% up, reinforcing the attraction of the sector to institutional investors.

INVESTMENT COMPARABLES

UNEXPIRED FLOOR AREA RENTAL PROPERTY ACRES TENANT(S) LEASE TERM RENTAL PRICE NIY COMMENTS DATE (SQ FT) (PSF) (YRS)

Bristol (Cribbs Causeway) Off market forward funding, 73,196 - Guy Salmon Limited 20 £1,136,000 £15.52 £24,000,000 4.43% Dec-18 Jaguar Land Rover 5 yearly RPI Reviews

Camberley Volkswagen 8,048 0.81 Volkswagen Group (UK) Ltd 7 £288,019 £35.79 £5,150,000 5.25% 5 Yearly Open Market Dec-18

Yeovil Volkswagen 22,221 1.87 Heritage Automotive Limited 20 £250,000 £11.25 £4,500,000 5.17% 5 Yearly RPI Reviews Nov-18

Huddersfield Jaguar Forward funding, 58,000 - Rybrook Vehicles Ltd 20 £700,000 £12.07 £13,000,000 5.00% Aug-18 Land Rover 5 yearly RPI Reviews

Newcastle Upon Tyne 30,282 3.26 Vertu Motors (VMC) Limited 15 £416,514 £13.75 £7,000,000 5.58% 5 yearly Fixed uplifts Aug-18 Vauxhall

Wolverhampton BMW 60,582 3.49 Rybrook Vehicles Ltd 20 £750,000 £12.38 £15,000,000 4.64% 5 Yearly RPI Reviews Jun-18 & MINI

Crawley Mercedes 44,360 2.75 Boiling Investments Limited 20 £700,000 £15.78 £15,150,000 4.33% 5 Yearly RPI Reviews Mar-18

Watford Fiat 9,720 0.25 Palmers (St Albans) Limited 8 £115,000 £11.83 £2,440,000 4.41% 5 Yearly Open Market Jan-18

VOLKSWAGEN • TERMINUS ROAD, CHICHESTER, PO19 8TX 7 Investment Rationale. Tenure.

The property is held under two leases with 129 years unexpired on both. The current ground rent is £6,337.34 pa. The occupational lease allows the landlord to Large car showroom with offices and a car deck fronted with a good recharge £8,000 pa to the tenant for the ground rent. sized display yard, and parts storage, workshop and additional parking provisions to the rear with a site coverage of 28%.

The locality has a strong mix of car dealership occupiers including Aston Rateable Value. Martin, Jaguar, Land Rover, Ford, Skoda, Andrew Page, Motorforce, and Enterprise Rent-A-Car. Other established occupiers include Jewson, We are advised that the property is assessed in the 2017 Valuation List as “Car Wolseley, Howdens, ATS, Dairy Crest, Cineworld, Premier Inn, Gourmet Showroom & Premises”. Rateable Value £222,000. Burger Kitchen, Dominos and Nandos.

The city has excellent road connections being situated adjacent to the A27 dual-carriageway, providing excellent connections along the South Coast between Worthing and Brighton to the east, and Portsmouth and Southampton to the west, and connecting with the M27 and M3 motorways. EPC.

Rating of C66 Chichester is an affluent city on the South Coast, located 15 miles east of Portsmouth, and 65 miles south of London. The city is well connected by road and rail, with Chichester train station 0.5 miles to the east and Gatwick Airport in close proximity 46 miles to the north east.

The unit fronts Terminus Road and is located at the heart of Terminus Road Industrial Estate, an established industrial and trade location benefitting from attractive population demographics.

Let to Peter Cooper Motor Group Limited (D&B Rating 2A2), with a low passing rent of £5.03 psf. The next review is in March 2022 and we anticipate a strong rental uplift at this review.

Terminus Road neighbours the £180 million Chichester Southern Gateway zone, a 30-acre brownfield regeneration project. When complete this will significantly enhance the connectivity and attraction of the location for customers, further increasing the area’s affluence.

8 VOLKSWAGEN • TERMINUS ROAD, CHICHESTER, PO19 8TX Vat & TOGC.

The property is elected for VAT and it is anticipated that the transaction will be treated as a Transfer of Going Concern (TOGC).

Data Room.

Data room access can be provided upon request.

Tenure.

Freehold Key Contacts.

Leo Zielinski Vicky Smith Phil Scott T: +44 (0)203 486 3468 T: +44 (0)203 486 3476 T: +44 (0)203 486 3460 M: +44 (0)7980 809031 M: +44 (0)7740 862 511 M: +44 (0)7342 051 757 E: [email protected] E: [email protected] E: [email protected]

Bill Bexson Eddie Highnam T: +44 (0)203 588 7200 T: +44(0)203 588 7200 M: +44 (0)7831 827 442 M: +44 (0)7733 535 952 E: [email protected] E: [email protected] Proposal. Conditions under which these particulars are issued All details in these particulars are given in good faith, but Gerald Eve LLP and Automotive Property Consultancy Ltd ( APC) for themselves and the Vendors/Lessors of this property for whom they act give notice that:- 1. These particulars do not and shall not constitute, in whole or in part, an offer or a contract or part thereof, and Gerald Eve LLP and Automotive Property Consultancy Ltd ( APC) have no authority to make or enter into any such offer or contract. We are instructed to seek offers for the freehold 2. All statements contained in these particulars are made without acceptance of any liability in negligence or otherwise by Gerald Eve LLP and Automotive Property Consultancy Ltd ( APC), for themselves or for the Vendors/Lessors. interest in excess of £2,020,000 subject to contract 3. None of the statements contained in these particulars is to be relied on as a statement or representation of fact or warranty on any matter whatsoever, and intending purchasers must satisfy themselves by whatever means as to the correctness of any statements made within these particulars. and exclusive of VAT. 4. The Vendors/Lessors do not make, give or imply, nor do Gerald Eve LLP and Automotive Property Consultancy Ltd ( APC) or any person in their employment have any authority to make, give or imply, whether in these particulars or otherwise, any representation or warranty whatsoever in relation to the property. A purchase at this level would reflect an attractive Net The statement does not affect any potential liability under the Property Misdescriptions Act 1991. Particulars issued March 2019. Initial Yield of 7.25% and a low capital value of £77 © 2019 Gerald Eve LLP. All rights reserved. Gerald Eve LLP is a limited liability partnership registered in and Wales with registered number OC339470 and its registered office at 72 Welbeck Street, per sq ft, after deducting purchasers costs of 6.28%. London, WIG 0AY

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