SWANJAR PORTFOLIO CAR DEALERSHIP INVESTMENT PORTFOLIO – FOR SALE Trident Park, Whitebirk Drive BLACKBURN AUDI Blackburn BB1 3HT BLACKBURN MANCHESTER 14 Hurricane Close LIVERPOOL STAFFORD AUDI Stafford ST16 1GZ Battlefield Enterprise Park SHREWSBURY AUDI Knights Way, Shrewsbury SY1 3AB STAFFORD SHREWSBURY BIRMINGHAM 1 SWANJAR PORTFOLIO CAR DEALERSHIP INVESTMENT PORTFOLIO FOR SALE BLACKBURN | STAFFORD | SHREWSBURY Portfolio Investment Summary • 100% rental income secured against Volkswagen Group (UK) Ltd • All dealerships let at affordable Audi rents and sitting below represented by the Audi brand, the UK’s number 2 ranked the median rent of UK Audi dealerships Prestige brand • 100% rental income secured against D&B 5A1 head-tenant • Audi are a brand at the forefront of the technological innovation covenant, supported by D&B 4A1 and 3A1 sub-tenant covenants rapidly feeding into the Motor Industry • Assets located in prime Motor Retail positions • Accordingly, Audi have sold 10.1% more new cars YTD in 2018 • Weighted average unexpired lease term of 6.6 years than at the same point in 2017, against an overall market that has fallen 8.8% this year • Combined rental income £774,534p.a., compared to sub-lease income of £853,943p.a. (profit rent of £79,409p.a.) • Audi is widely recognised as a durable and desirable franchise to hold under-pinning these investments • Potential for asset enhancement • Price £11,600,000 equating to 6.27% NIY BLACKBURN AUDI STAFFORD AUDI SHREWSBURY AUDI 2 SWANJAR PORTFOLIO CAR DEALERSHIP INVESTMENT PORTFOLIO FOR SALE BLACKBURN | STAFFORD | SHREWSBURY Portfolio Summary Headlease Dealer Sub Rents Description Lease Term Next Lease Unexpired Site Passing Underlet Underlet Property Address SQ FT Acres £psf Comments & Tenure Start (yrs) Review End Term Density Rent Rent £psf Long Leasehold for a term of 999 years (unexpired term 982 years) Trident Park, from December 2000 at 5 yearly Whitebirk a peppercorn rent. There are no Audi reviews Drive, restrictions on use, alterations 21/12/2004 20 21/12/2019 20/12/2024 6.6 25,251* 2.24 26% £271,538 £13.52 £278,940 £13.89 Blackburn to market Blackburn, or alienation. Let to Volkswagen rent BB1 3HT Group (UK) limited and underlet to Thompson Motor Company (Preston) Limited. The property is held Long Leasehold for a term of 999 years 14 Hurricane 5 yearly (unexpired term 986 years) from Audi Close, reviews December 2004. Let to Volkswagen 21/12/2004 20 21/12/2019 20/12/2024 6.6 23,692** 2.12 26% £305,000 £13.82 £340,021 £15.40 Stafford Stafford to market Group (UK) Limited and underlet to ST16 1GZ rent Swansway. There is an option to buy in the freehold after 2029. Long leasehold for a term of 999 Battlefield years (unexpired term 980 years) Enterprise from October 1998 at £300 p.a. 5 yearly Audi Park, ground rent. Landlord consent is reviews 21/12/2004 20 21/12/2019 20/12/2024 6.6 19,730*** 2.04 22% £197,996 £10.69 £234,982 £12.68 Shrewsbury Knights Way, required for external alteration, to market Shrewsbury, change of use and alienation. Let rent SY1 3AB to Volkswagen Group (UK) Ltd and underlet to Lancaster PLC. AWULT 6.6 68,672 6.4 25% £774,534 £11.28 £853,943 £12.43 * Including tenant’s improvements totalling 5,167 sq ft (480.0 sq m) ** Including tenant’s improvements totalling 1,617 sq ft (150.0 sq m) *** Including tenant’s improvements totalling 1,202 sq ft (111.0 sq m) 3 SWANJAR PORTFOLIO CAR DEALERSHIP INVESTMENT PORTFOLIO FOR SALE BLACKBURN | STAFFORD | SHREWSBURY Tenant Covenant Volkswagen Group (UK) Ltd Volkswagen Group United Kingdom Limited is the UK arm of the Volkswagen Group, which has consistently been the largest car manufacturer in Europe, and the second largest manufacturer of cars globally. In excess of 3,500 people work with Volkswagen Group UK of which approximately 850 are employed directly at the Milton Keynes Head Office. The company has been established in the UK since 1953 when it became the official UK importer. For the year ending December 2016 the company generated turnover of around c.£9.79billion, an increase of 3.84% on 2015. As of April 2018, Volkswagen Group United Kingdom Limited has a D&B rating of 5A1 representing a minimum risk of business failure. Volkswagen Group Year Ended Year Ended Year Ended (UK) Ltd 31/12/2016 31/12/2015 31/12/2014 Sales Turnover £9,792,900,000 £9,430,300,000 £8,868,400,000 Profit/(Loss) before tax £125,500,000 £158,600,000 £154,700,000 Tangible Net Worth Not Available £709,400,000 £725,300,000 Net Current Assets £351,900,000 £418,000,000 £726,900,000 (Liabilities) Audi Franchise Summary Audi is a German multinational automobile manufacturer and wholly owned subsidiary of Volkswagen Group, known primarily for their luxury vehicles. So far in the UK in 2018 Audi have sold 47,915 new cars and command a market share of 6.67%, up from 5.83% at the same stage in 2017. This and Audi’s performance in the National Franchised Dealers Association (NFDA) Winter 2017/18 Dealer Attitude Survey underscore the fact that for UK dealers Audi is a desirable franchise to hold. Audi ranked 2nd overall among Prestige brands, ahead of BMW, Jaguar, Land Rover and others. Audi as a Prestige brand has an enduring appeal to consumers as shown by its resilience to market disruptors and strong year to date performance. 4 SWANJAR PORTFOLIO CAR DEALERSHIP INVESTMENT PORTFOLIO FOR SALE BLACKBURN | STAFFORD | SHREWSBURY Automotive Investment Market Commentary As 2018 progresses we are going to see further evidence of evolution in the motoring world, New car sales have been easing, down 12.4% year to date, denoting a return to a more natural increasingly fast-paced technological innovation and reshaping consumer sentiment, influenced long-term equilibrium after a record high in Q1 2017. Though dealers remain optimistic about by government policy, are combining to move the sector forward. This gradual paradigm shift profitability for 2018, which they predict to be driven mainly by Prestige cars, used cars, and an brings with it an opportunity for Investors, alert to the potential value of new income streams. amalgamation of the two. Now more than ever the durability of the franchises dealers operate The gradual re-orientation of the motor retail sector means it is a good time to invest in the is key to their success. sector. Meanwhile, the nationwide nature of Motor Retail Investment offers Investors exposure to the Amidst all this activity the car dealership remains central to the delivery of this evolving product burgeoning Alternatives sector, risk divergence and the benefit of enhanced dealer profitability package. This is because, far from being a threat, new technologies such as Electric Vehicles (EVs) from lower cost areas. A distinctive trend has been the recognition by investors of the worth of are an opportunity for dealers. Just as the Motor Retail sector represents a chance for investors a strong dealer covenant supported by a top-rated brand. to diversify their income, the new technology and ownership structures offer a unique chance At the start of 2018 the market is cautiously optimistic. Used cars are likely to grow in volume, for dealers to innovate, diversify and incrementally increase revenue. diesels will continue their fade from popularity, and Electric Vehicles will arrive in greater Personal mobility will remain of upmost importance to people, and the car will remain the numbers. All these factors offer asset enhancement opportunity for automotive real estate and principle way in which people move. Whether it be new cars, used cars, electric cars, car sharing, will drive continued investment in the sector. subscription services, ride hailing, or indeed autonomous driving vehicles, someone has to own Thus, the Motor Retail Investment sector remains dynamic and offers Investors sustaining long them, service them, insure them, and replace them. Manufacturers will need a dealer network term income and capital growth fundamentals. to supply their vehicles, premises are needed to service them, and property is needed to serve the used car market. Other retailing models will support this core market footprint. 5 SWANJAR PORTFOLIO CAR DEALERSHIP INVESTMENT PORTFOLIO FOR SALE BLACKBURN | STAFFORD | SHREWSBURY BLACKBURN AUDI Trident Park, Whitebirk Drive, Blackburn BB1 3HT SUMMARY • Prominent main road dealership in prime • Sub-tenant has made significant motor retail location adjacent to dual investment into improving the property carriageway • Prestige franchise • Modern purpose-built dealership which • 100% income secured against D&B 5A1 has been extended head tenant covenant under-let to D&B 4A1 covenant 6 SWANJAR PORTFOLIO CAR DEALERSHIP INVESTMENT PORTFOLIO FOR SALE BLACKBURN | STAFFORD | SHREWSBURY Description Tenancy The property comprises a modern purpose built • The property is leased to Volkswagen Group (UK) Ltd on a 20-year lease from 21st Audi dealership and has a Gross Internal Area of December 2004 on FRI terms and underlet to Thompson Motor Company (Preston) Ltd approximately 25,251 sq ft (2,346 sq m). The site • Rent reviews are five yearly to Market Rent with the current passing rent at £271,538 area is approximately 2.24 acres producing a site per annum. Subsequent rent reviews will be five yearly in an upwards only direction. density of 20%. • Unexpired term 6.6 years with the next rent review being in December 2019 SQ FT SQ M Showroom and Offices1 7,674 712.96 Service Reception2 735 68.26 Workshop Control W H I 666 61.88 TE B IR and Ancillary K D R I VE Workshop and Parts3 10,219 949.36 Valet Bay4 1,262 117.23 First floor 5 Offices 3,338 310.11 0m 10m 20m 30m Sub-Tenant Covenant Summary Ordnance Survey © Crown Copyright 2018.