HIGH QUALITY PRIME CAR SHOWROOM INVESTMENT

BMW & 501 DUNSTABLE ROAD � LUTON � LU4 8QN A14 Northampton A428 CAMBRIDGE Investment Summary. Location.A5 A11 Bedford M1 A1 A421 Excellently positioned fronting A43 Situated on the Madford onto the A505, the main arterial Retail Park, 2 miles north west Milton Keynes route which leads directly from of Luton Town Centre, 20 miles the M1 (J11), 1 mile to the west, to south east of Milton Keynes A6 the centre of Luton M11 A5 A10 Two adjoining modern glazed showrooms, refurbished in 2016 Floor Area: 37,400 sq ft Stevenage Luton 80 display bays (293 in total) Site Area: 2.3 acres A41 A418 11 Workshops and large parking (29% site coverage) provisions Aylesbury A1(M) M1 Single let to Ivor Holmes Limited A41 Harlow

Guaranteed by Specialist Cars 21 21a Holdings Limited (D&B Rating AWULT: 17.8 yrs (to expiry) 4A1) M40 AGA from Pendragon PLC until Watford M25 Dec 2031 M25

Marketing Rent: RPI-linked annual rent reviews £ £310,277 pa (£7.85 psf) capped at 2.77% pa

Refurbished in 2016 by the Tenure: Freehold tenant at a cost of £2 million

Proposal

We are instructed to seek offers for the freehold interest in excess of £5,550,000 subject to contract and exclusive of VAT. A purchase at this level would refl ect an attractiveNet Initial Yield of 5.25% and a low capital value of £148 per sq ft, after deducting purchasers costs of 6.61%. Site Plan. Site

*boundary for indicative purposes only

2 BMW & MINI � 501 DUNSTABLE ROAD, LUTON, LU4 8QN 17 16 TO LONDON

M1

LUTON STATION 15 J11

14 TO LONDON Sovereign Park 12 13 Bilton Way 9 Industrial Estate 10 11 Local 7 8 Occupiers. 6 2 5 1 1. Currys PC World, McDonalds & Next Madford Retail Park 2. Arriva 3. Tyre City 3 4. The Range 4 5. Pizza Hut A505 6. KFC 7. Hatters Way Retail Park 8. SCS Sofa 9. Hertz, B&Q, Trade Point 10. Aldi 11. SOS Direct Mail 12. Screwfi x TO M1 (J11) 13. SH Pratt Group 14. Bestway Cash & Carry 15. Toyota 16. Vauxhall 17. London Luton Airport

BMW & MINI � 501 DUNSTABLE ROAD, LUTON, LU4 8QN 3 Tenancy Information.

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

BMW & Mini, 501 Specialist Cars Ivor Holmes Annual RPI Dunstable Road, Luton, Holdings Limited 37,400 22-Oct-2006 21-Dec-2036 - 25-Dec-2019 £310,277 £7.85 Limited capped 2.77% LU4 8QN (D&B Rating 4A1)

*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.

Annual rent reviews on 25 December which are calculated as The property was assigned in to Ivor Holmes Limited (N2) The building has been measured in accordance the lesser of the rent payable immediately before the review in 2017. Pendragon PLC (D&B Rating 5A1) are providing an with the RICS Code of Measuring Practice (Sixth date (“the Rent”) subject to RPI linked increases and the Rent AGA for the remainder of the original lease to December Edition) and provides the following Gross Internal multiplied by 102.77%. The reversionary lease, commencing 2031. A reversionary lease has been agreed to extend the Areas: December 2031 has a day one rent review and no further reviews. term by 5 years to December 2036. The reversionary lease is guaranteed by Specialist Cars Holdings Limited (D&B Rating 4A1), and are one of the largest privately owned Accommodation Sq M Sq Ft Franchise Information. BMW and MINI dealers in the UK. GROUND FLOOR: Financial Summaries are set out below. BMW and Mini are part of the BMW Group, which also Showroom & Ancillary 1,476 15,908 encompasses Rolls Royce. In the UK, BMW has a market share of 7.3% (Dec 2018), an increase on the 2017 figure of 6.9%. Similarly, IVOR HOLMES LTD 31-Dec-15 31-Dec-16 31-Dec-17 Workshops, Parts & Valet 1,215 13,061 Mini’s market share also increased in 2018 to 2.8% (Dec 2018), up from 2.7% in the previous year. BMW sold 172,048 new cars in 2018, TURNOVER £36,029,404 £37,689,599 £37,483,646 FIRST FLOOR: placing them 5th in the UK by market share, and Mini sold 67,021 PROFIT /(LOSS) -£356,240 -£502,648 -£462,377 Office Areas & Ancillary 783 8,431 new cars, placing them 14th. BEFORE TAX TOTAL GIA 3,474 37,400* TANGIBLE NET - - - BMW Group have invested nearly £2 billion in its UK operations WORTH since 2000. MINI was ranked as the 7th best-selling car of 2018, Display Parking 80 with 44,904 registrations. They are ranked 5th overall in the SEPCIALIST CARS 31-Dec-15 31-Dec-16 31-Dec-17 Customer & Additional Parking 158 Summer 2018 Dealer Attitude Survey with a score of 7.5 (average HOLDINGS LTD score 5.7), with BMW ranked 11th with a score of 6.0. BMW was an TOTAL PARKING 238 SPACES early entrant to the electric vehicle game having launched the TURNOVER £196,946,253 £196,210,755 £178,175,906 i3 in 2017. BMW’s electric vehicle range has since been added PROFIT /(LOSS) £2,162,267 £1,911,892 £926,184 *Including 2,259 sq ft of tenant improvement works to with two hybrid sports cars; the i8 and i8 Roadster. Mini has a BEFORE TAX growing range of new car designs and updated technology, and TANGIBLE NET £17,597,585 £17,884,855 £19,514,398 has created a new electric car due to go on sale in 2019. WORTH

4 BMW & MINI • 501 DUNSTABLE ROAD, LUTON, LU4 8QN Nearby M1 ADULT CATCHMENT POPULATION Dealerships. Luton & Sundown A5 Industrial Estate 5 MILES North Luton 400,000 Industrial Estate 10 MILES FRANCHISE - DEALER Cradock 675,000 Industrial Estate A505 5 1. M1 Citroen & Subaru - Slip End Sovereign Garages TOTAL POPULATION 3 Park EARNING £20,000+ PA Cosgrove 2. Ford - Hartwell London Industrial Estate (AGE 18+ YEARS) 8 LUTON Luton 3. Hyundai - Perrys Airport 2 Royal London 6 7 5 MILES Mall M1 4. Mazda & - Brayley 84,000 Firbank & Dalroad The Business Centre 5. Kia - Grovebury Cars Industrial Estates & Barratt Industrial 10 MILES Park 6. Toyota - Steven Eagell A5183 202,000 1 Capability Green 7. Vauxhall - Thurlow Nunn Business Park

8. Vauxhall - Thurlow Nunn M1 DRIVE TIME TO NEAREST TOWNS / CITIES

25 MINUTES MILTON KEYNES 4 (18 MILES) 30 MINUTES WATFORD (17 MILES)

35 MINUTES STEVENAGE (16 MILES)

45 MINUTES AYLESBURY (20 MILES)

45 MINUTES CAMBRIDGE (42 MILES)

55 MINUTES LONDON (36 MILES) M1 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 ’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 BMW & MINI • 501 DUNSTABLE ROAD, LUTON, LU4 8QN 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, 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 5 yearly RPI Reviews

Camberley Volkswagen 8,048 0.81 (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

BMW & MINI • 501 DUNSTABLE ROAD, LUTON, LU4 8QN 7 Investment Rationale. Tenure.

Freehold. Two adjoining prominent, modern car showrooms, with double height glazing, offices, ancillary space and a large workshop with 6m eaves. Tenant refurbishment works of £2 million in 2016, displaying their commitment to the location.

One of the best positioned car showrooms in Luton. Situated on Rateable Value. a roundabout of the A505, the dealership offers excellent visibility fronting the main route between Junction 11 of the M1 motorway, 1 mile to the west and Luton Town Centre, 2.5 miles to the south east. We are advised that the property is assessed in the 2017 Valuation List as “Car Showroom & Premises”. Rateable Value £390,000. The M1 was recently widened in a £230 million project between Luton and Milton Keynes. This will significantly increase the capacity of the road, improving access and connectivity of Luton, and will support further regeneration in the local area.

Luton is situated 30 miles north of London, with easy access to the UK’s EPC. major cities being adjacent to the M11, and only minutes from the M25 and A1, along with excellent rail and air connectivity. To be provided.

Strong retail destination being located on the Madford Retail Park, with a good mix of surrounding occupiers including Currys PC World, The Range, Team Knowhow and Eurocell. To the south is Hatters Way Retail Park, where occupiers include Dreams, DFS, Harveys, ScS, B&Q, ALDI, TradePoint, and Hertz.

Let to Ivor Holmes Limited with a low passing rent of £7.85 psf. The tenant has signed a 5 year extension from December 2031, guaranteed by Specialist Cars Holdings Limited (D&B Rating 4A1), displaying their commitment to the location. Pendragon Plc (D&B Rating 5A1) have on AGA on the original lease to December 2031.

Lease expiry in December 2036, with 17.8 years unexpired. Annual upwards only rent reviews calculated to the lesser of RPI linked increases and 2.77%, offering a secure income stream.

8 BMW & MINI • 501 DUNSTABLE ROAD, LUTON, LU4 8QN 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 £5,550,000 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 5.25% and a low capital value of £148 © 2019 Gerald Eve LLP. All rights reserved. Gerald Eve LLP is a limited liability partnership registered in England and Wales with registered number OC339470 and its registered office at 72 Welbeck Street, per sq ft, after deducting purchasers costs of 6.6%. London, WIG 0AY

Design by Zinc Digital