Bmw + Volvo A452 Europa Way | Warwick | Cv34 6Sp

BMW + VOLVO A452 EUROPA WAY | WARWICK | CV34 6SP

PRIME AUTOMOTIVE INVESTMENT BMW + VOLVO A452 EUROPA WAY WARWICK 01 CV34 6SP INVESTMENT SUMMARY

01 • Prime car dealership destination trading Investment Summary under the BMW, Volvo and Sytner Select brands 02 • The property occupies a prominent position Location fronting the A452 Europe Way which links 03 Leamington Spa to the M40 Situation • Located on the established Heathcote Industrial Estate, 1.7 miles south east of 04 Warwick, 2.4 miles south of Royal Surrounding Leamington Spa and three miles north of Development Activity Junctions 13 and 14 of the M40 Motorway 05 • The property comprises three self contained Description buildings extending to 38,216 sq ft (3,550.4 sq m), occupying a substantial 06 site area of 3.86 acres (1.56 hectares) Accommodation • A low site coverage of circa 25% 07 • Let to Sytner Group Limited (D&B 5A1), Tenure & Tenancy the UK’s leading retailer of prestige and specialist cars, for a further 6.4 years 08 • Sytner Group are the second largest Covenant Status dealership group in the United Kingdom 09 • A current passing rent of £645,032 per UK Automotive Industry: annum (£16.88 psf) with a minimum Occupational guaranteed uplift in Oct 2017 to £766,104 pa 10 (effectively 3.5% per annum compounded) UK Automotive Industry: • Freehold Investment We are instructed to seek offers in excess of £9,000,000 (Nine Million Pounds), reflecting 11 a Net Initial Yield of 6.72% assuming VAT, EPC, Proposal, purchaser’s costs of 6.68%. This provides an & Further Information Equivalent Yield of 7.94% and Reversionary Yield of 7.98% (Oct 2017). BMW + VOLVO A452 EUROPA WAY WARWICK 02 CV34 6SP LOCATION

01 Warwick is an affluent county town situated between Stratford-upon-Avon and Royal Investment Summary 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, 02 and have an estimated total residential population in excess of 108,000. Location A425 The town benefits from excellent road connectivity with the M40 providing access 03 to Birmingham in the north and London in the south. The M42 provides access to the Royal Situation Leamington M6 and the north of England, as well as the M5 and the south west. Rail services to Warwick Spa London Marylebone are approximately 1 hour 42 minutes. Due to its proximity to the Warwick Bypass 04 national motorway network, Warwick is home to many companies’ headquarters Surrounding Myton Road A452 including National Grid, Phillips 66, JET, Bravissimo, Volvo Group UK (Volvo Trucks) and Development Activity Queensway IBM, together with regional headquarters such as Bridgestone, Calor, Kantar and A4189 05 Gallows Hill Delphi Automotive. Description Warwick, Royal Leamington Spa and Stratford-upon-Avon form a highly sought A46 Heathcote Lane 06 after vehicle retailing market territory, particularly for prestige brands given the Accommodation excellent demographics. The majority of existing dealerships in the area tend A425 to be compromised either due to age, configuration or lack of prominence. 07 Stratford Road SAT NAV: CV34 6SP Tenure & Tenancy M42 M6TOLL 08 A452 M69 Covenant Status Harbury Lane 15 09 M1 UK Automotive Industry: BIRMINGHAM M6 14 Tachbrook Road Occupational A452 M40 M5 10 A429 Banbury Road COVENTRY RUGBY UK Automotive Industry: M42 Investment M40 M45 M40 Bishop’s REDDITCH 11 Tachbrook WARWICK VAT, EPC, Proposal, A452 & Further Information STRATFORD UPON AVON

13 M40 BMW + VOLVO A452 EUROPA WAY WARWICK CV34 6SP

01 Investment Summary 02 Location 03 Situation 04 Surrounding Development Activity 05 Description 06 Accommodation 07 Tenure & Tenancy 08 Covenant Status 09 UK Automotive Industry: Occupational 10 UK Automotive Industry: PRIME Investment 11 AUTOMOTIVE VAT, EPC, Proposal, & Further Information INVESTMENT BMW + VOLVO A452 EUROPA WAY WARWICK 03 CV34 6SP SITUATION

01 The property is situated in a prominent Investment Summary position off the A452 roundabout on Europa Way, the principle route from Junctions 13 and 02 14 of the M40 to the town centres of Warwick Location and Leamington Spa. The subject property is 03 the most prominent car dealership in the area, Situation with nearby car dealerships including Ford, Peugeot, Renault, Citroen and VW. 04 To the north east is Leamington Shopping Surrounding Park (135,000 sq ft), the only fashion park Development Activity in the town and anchored by a 110,600 sq ft 05 Sainsbury’s and petrol filling station. Other Description retailing includes the Shires Retail Park (29,786 sq ft) and Myton Road Retail Park, 06 together with Morrisons, Aldi and Lidl. To the Accommodation east of the property is mixed use commercial 07 comprising Heathcote Industrial Estate and Tenure & Tenancy Tachbrook Park. 08 Major new residential development sites, accessed from Europe Way, Heathcote Lane Covenant Status and Gallows Hill, have been granted planning 09 permission for circa 2,165 new homes; UK Automotive Industry: together with schools, retail, leisure and Occupational other uses. Gallagher and Barratt Homes have commenced development on the 10 Heathcote Lane site. UK Automotive Industry: Investment PRIME 11 VAT, EPC, Proposal, AUTOMOTIVE & Further Information INVESTMENT BMW + VOLVO A452 EUROPA WAY WARWICK 04 CV34 6SP SURROUNDING DEVELOPMENT ACTIVITY

01 Investment Summary WARWICK LEAMINGTON SPA 02 Location

03 LEAMINGTON SPA Situation SHOPPING PARK 04 TACHBROOK PARK Surrounding Development Activity 735 NEW HOMES, RETAIL AND EDUCATION 05 AMEC Description HEATHCOTE 06 INDUSTRIAL ESTATE Accommodation RETIREMENT COMMUNITY 07 Tenure & Tenancy

08 JAGUAR LAND ROVER ACADEMY Covenant Status 220 NEW HOMES, 09 GALLAGHER & BARRATT UK Automotive Industry: SHARED Occupational ACCESS ROAD 10 UK Automotive Industry: Investment 425 NEW HOMES AMEC 11 785 NEW HOMES, VAT, EPC, Proposal, RETAIL & EDUCATION GALLAGHER & Further Information BMW + VOLVO A452 EUROPA WAY WARWICK 05 CV34 6SP DESCRIPTION

01 The property comprises three purpose built, Investment Summary self-contained car dealerships with customer and display car parking totalling circa 38,216 02 sq ft (3,550.4 sq m). The buildings are of Location steel frame construction with fully glazed 03 elevations to the showrooms. Internally, Situation each building provides showroom, offices, workshop and ancillary accommodation. 04 There are electric charging points and Surrounding a car wash to the rear of Unit 1. Development Activity Unit 1 is occupied by Rybrook BMW, Unit 2 05 is occupied by Sytner Volvo and Unit 3 trades Description as Sytner Specialist Cars. Units 2 and 3 06 are accessed through a security barrier. Accommodation 07 Tenure & Tenancy 08 Covenant Status 09 UK Automotive Industry: Occupational 10 UK Automotive Industry: Investment 11 VAT, EPC, Proposal, & Further Information BMW + VOLVO A452 EUROPA WAY WARWICK CV34 6SP

01 We have measured the property in accordance with the RICS Code of Measuring Practice Investment Summary (Sixth Edition) to provide the following approximate gross internal areas (GIA):

02 ACCOMMODATION SQ M SQ FT Location BMW 03 Ground Floor Showroom, Offices and Ancillary 923.8 9,943 ACCESSED FROM Situation HEATHCOTE LANE 04 Ground Floor Workshop and Storage 897.8 9,664 Surrounding First Floor Offices and Ancillary 213.7 2,300 Development Activity Sub Total 2035.3 21,907 05 SUBLET TO Description VOLVO RYBROOK LTD 06 Ground Floor Showroom, Offices and Ancillary 731.9 7,878 Accommodation Ground Floor Workshop and Storage 352.7 3,796

07 First Floor Offices and Ancillary 83.2 896 Tenure & Tenancy 08 Sub Total 1,167.8 12,570 Covenant Status SYTNER SELECT 09 Ground Floor Showroom, Offices and Ancillary 218.0 2,347 UK Automotive Industry: Occupational Ground Floor Workshop and Storage 26.5 285 10 First Floor Offices and Ancillary 102.8 1,107 UK Automotive Industry: Sub Total 347.3 3,739 Investment 11 Total 3,550.4 38,216 VAT, EPC, Proposal, The total site area is 3.86 acres (1.56 hectares) providing a low site coverage of & Further Information approximately 25%. BMW + VOLVO A452 EUROPA WAY WARWICK 07 CV34 6SP TENURE

01 The site is held Freehold. Investment Summary 02 Location 03 Situation TENANCY 04 Surrounding The property is let in its entirety to Sytner Development Activity Group Limited on a 25 year lease from 30 05 October 1997, on Full Repairing and Insuring terms. The passing rent is currently £645,032 Description per annum (£16.88 psf) and is subject to 06 reviews every five years, the next being Accommodation 30th October 2017. 07 At review the rent is subject to a minimum Tenure & Tenancy increase to the higher of open market value of the whole or permitted parts or a multiplier 08 of 1.1877 (effectively 3.5% per annum Covenant Status compounded). The rent will therefore 09 increase to a minimum of £766,104 per annum (£20.05 psf) in 2017. UK Automotive Industry: Occupational Unit 1 has been sublet to Rybrook Limited on a lease expiring 15th October 2022. The lease 10 is drafted on the same principle terms as the UK Automotive Industry: Head Lease. The passing rent is £393,715 per Investment annum (£17.97 psf) and is subject to identical 11 review provisions as the Head Lease. The rent VAT, EPC, Proposal, will therefore increase to a minimum of & Further Information £467,621 per annum (£21.35 psf) in 2017. BMW + VOLVO A452 EUROPA WAY WARWICK 08 CV34 6SP COVENANT STATUS

01 SYTNER GROUP LIMITED (Company Number 2883766) Investment Summary Sytner Group, the UK’s largest Prestige Motor In 2002, Sytner Group was acquired by 02 Dealer, was founded in 1968 and has grown the American-based motor retailer, Penske Location to encompass 19 of the world’s most desirable Automotive Group, the second largest publicly 03 car manufacturers in over 140 dealerships traded automotive retailer in the United States Situation throughout the UK. employing over 22,000 people worldwide. Consequently, the Group delisted from the 04 Historically the Group solely operated BMW London Stock Exchange and today, Sytner dealerships, having opened their first in Surrounding employs almost 7,000 people and has achieved Trade Parts Development Activity Nottingham in 1970, before expanding to BMW a top five position in the ‘Sunday Times Best Specialists 05 Leicester and BMW Sheffield. After many years Big Companies to Work For’ working exclusively with BMW, the Group for six consecutive years. Description diversified to represent other prestige marques. In 2015, the Group finished 06 By 1997 the dealership count had reached second overall and was awarded Accommodation double figures and included brands such as a coveted ‘Three Star’ Award Ferrari, Audi, Mercedes-Benz, Land Rover and for the third year running. 07 Porsche. Later that year, the company floated Tenure & Tenancy on the Stock Market and became Sytner Group For the financial year ending December 2014, PLC, enabling it to grow further throughout the tenant company (Sytner Group Limited) 08 the UK. reported turnover of £3,665,451,000 and Covenant Status a pre-tax profit of £81,393,000. The tenant 09 has a Dun and Bradstreet rating of 5A1. UK Automotive Industry: Occupational Provided below is a summary of the tenant’s most recent financial performance:

10 Financial Year End 31 Dec 2014 31 Dec 2013 31 Dec 2012 UK Automotive Industry: Investment Turnover £3,665,451,000 £3,220,886,000 £2,967,035,000 11 Profit £81,393,000 £64,660,000 £54,609,000 VAT, EPC, Proposal, Net Worth £87,057,000 £97,003,000 £114,399,000 & Further Information BMW + VOLVO A452 EUROPA WAY WARWICK CV34 6SP PRIME AUTOMOTIVE 01 Investment Summary INVESTMENT 02 Location 03 Situation 04 Surrounding Development Activity 05 Description 06 Accommodation 07 Tenure & Tenancy 08 Covenant Status 09 UK Automotive Industry: Occupational 10 UK Automotive Industry: Investment 11 VAT, EPC, Proposal, & Further Information BMW + VOLVO A452 EUROPA WAY WARWICK 09 CV34 6SP UK AUTOMOTIVE INDUSTRY

01 OCCUPATIONAL Investment Summary The UK and European dealership occupational market continued to strengthen throughout 2015 and Q1 2016. Institutional and private equity firms demonstrated a strong appetite to invest in 02 the sector. This is largely due to the secure income profile offered by the tenants, together with Location the ability to secure guaranteed rental uplifts through the terms of the leases. 03 New car registrations in the UK grew 2.0% in April 2016 to 189,505 units, according to the Situation Society of Motor Manufacturers and Traders (SMMT). The largest growth sectors were that 04 of fleet and business, whilst registrations of alternative fuel vehicles rose 26.8%, in line Surrounding with the year so far. Development Activity This continued growth has given dealers Manufacturers and dealer network groups 05 the confidence to invest and grow their continue to improve their portfolios through Description businesses. There has been a transition from redevelopment and relocation. Dealers are under growth through acquiring other businesses increasing pressure to upgrade their portfolios to 06 to investing in their portfolios, and further comply with the manufacturers’ corporate image Accommodation consolidation is forecast to be a feature requirements and accommodate increasingly 07 of the market going forward. larger model ranges. Tenure & Tenancy TOP 10 UK DEALER NETWORKS 08 Rank Name Turnover Year Covenant Status 1 Pendragon £4,453,900,000 2015 09 2 Sytner Group £3,665,451,000 2014 UK Automotive Industry: 3 Lookers £3,649,100,000 2015 Occupational 4 Arnold Clark Automobiles £3,265,412,000 2014 10 5 Inchcape Retail £2,662,400,000 2015 UK Automotive Industry: 6 Vertu Motors £2,074,912,000 2014 Investment 7 Mercedes-Benz Retail Group £1,734,104,000 2014 11 8 Jardine Motors Group £1,528,657,000 2014 VAT, EPC, Proposal, 9 TrustFord £1,441,278,000 2014 & Further Information 10 Marshall Motor Group £1,232,761,000 2015 Source: Automotive Management Online BMW + VOLVO A452 EUROPA WAY WARWICK 10 CV34 6SP UK AUTOMOTIVE INDUSTRY

01 INVESTMENT Tenant Net Initial Term Investment Summary Date Location Price Reviews The UK and European dealership investment market also continued to (D&B Rating) Yield Certain 02 strengthen throughout 2015 and Q1 2016. Institutional and private Glaze Portfolio Pendragon Property Holdings Ltd OMV / £26,350,000 Location equity firms demonstrated a strong appetite to invest in the sector, Apr 16 (Hull, Bradford, (2A1), Cars 2 Ltd (2A2) & Albert 6.00% 12.8 years Fixed On the market attracted by the secure income profiles with long leases let to Mansfield & York) Farnell Ltd (4A1) Annual 03 manufacturers or dealer network groups, together with the Apr 16 Carbase, Bristol Brent Cars Ltd (2A3) £4,475,000 6.30% 19 years RPI Situation prevalence of guaranteed rental uplifts in many leases. Ford Commercial, 04 Manufacturers and dealer network groups continue to drive yields on Mar 16 Ford Retail Ltd (5A3) £6,620,000 4.57% 15 years RPI Dagenham Surrounding prime stock achieving Net Initial Yields as low as 4.5% for best in class. Development Activity In many instances, recent transactions have attracted strong interest Bristol Street First Investments Ltd Feb 16 Ford, Birmingham £4,800,000 6.40% 11.7 years OMV 05 resulting in purchase prices ahead of asking levels. (5A1) Description With the limited supply of stock currently available, the market is Jan 16 Nissan, Bristol Nissan Motor (GB) Ltd (5A1) £6,025,000 4.58% 20 years OMV / RPI 06 forecast to sustain the strong investor demand, from both experienced institutions and private equity, together with new investors Mill Volvo, Sub-let to Mill Garages North East Accommodation Dec 15 £1,700,000 6.17% 7 years OMV diversifying from other sectors. Sunderland Ltd from Inchcape Estates Ltd (5A1) 07 We set out recent comparable investment transactions opposite: Pendragon Property Holdings Ltd Fixed Tenure & Tenancy Oct 15 Mini Harrogate £1,920,000 5.20% 9.7 years (Pendragon PLC) (2A1) Annual 08 Covenant Status Specialist Cars Ltd (Specialist Cars Jul 15 BMW / Mini, Tring Holdings Ltd & Specialist Cars Ltd) £7,620,000 4.85% 19.5 years RPI 09 (2A2) / Malthurst (5A1) UK Automotive Industry: Occupational Jun 15 VW, Shrewsbury Volkswagen Group UK Ltd (5A1) £5,176,000 5.75% 13.6 years OMV

10 Jun 15 Renault, Bolton Renault UK Ltd (5A1) £4,000,000 6.25% 6.7 years OMV UK Automotive Industry: Investment Dec 14 VW, Cheltenham Volkswagen Group UK Ltd (5A1) £3,915,000 6.16% 10 years OMV 11 Ford Retail Ltd (Ford Retail Group VAT, EPC, Proposal, Dec 14 Ford, Staines £4,500,000 6.30% 11 years OMV Ltd) (5A3) & Further Information BMW + VOLVO A452 EUROPA WAY WARWICK 11 CV34 6SP VAT EPC PROPOSAL 01 The property has been elected for VAT and Energy Performance Certificates are available We are instructed to seek offers in excess FURTHER Investment Summary it is anticipated that the transaction will upon request. of £9,000,000 (Nine Million Pounds). be treated as a TOGC. A purchase at this level would reflect INFORMATION 02 a Net Initial Yield of 6.72%, assuming Location purchaser’s costs of 6.68%. This provides an Jonny Doulton 03 Equivalent Yield of 7.94% and a Reversionary 020 7255 8099 Situation Yield of 7.98% (Oct 2017). [email protected]

04 Martin Carey Surrounding 020 7255 8085 Development Activity [email protected] 05 Description Rebecca James 020 7255 8040 06 [email protected] Accommodation 07 Tenure & Tenancy 08 Covenant Status Rapleys LLP is registered as a Limited Liability Partnership in England and Wales. Registration No: OC308311. Registered Office at Falcon Road, Hinchingbrooke Business Park, HUNTINGDON PE29 6FG. A full list of 09 Members is available on our website or at any of our offices during normal business hours. Rapleys LLP operates an Environmental Management UK Automotive Industry: System which complies with the requirements of ISO 14001:2004. Regulated by RICS. Any maps are for identification purposes only and Occupational should not be relied upon for accuracy. Reproduced by permission of Geographers A-Z Map Co. Ltd. Licence No. A0203. This product includes mapping data licensed from Ordnance Survey - © Crown Copyright 10 2001. Licence No. 100017302 and © Crown Copyright. UK Automotive Industry: All rights reserved. Licence No. ES 100004619. Misrepresentation Act: Investment 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 11 of a contract. No person in the employment of Rapleys or their joint agents has authority to give any representation or warranty in respect VAT, EPC, Proposal, of this property. All prices or rents are quoted exclusive of VAT. June 2016. & Further Information Design by carve-design.co.uk 12397.