BMW & Mini 501 DUNSTABLE ROAD LUTON LU4 8QN - Automotive Property Consultancy
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HI G H QUALI TY PRI ME CAR SHOWROOM INVESTMENT BMW & Mini 5 01 D UNSTABLE ROAD � LUTON � LU 4 8QN
A14
Northampton
A428
Investment Summary. Location.
CAMBRIDGE
A5
A11
Bedford
M1 A1
A43 A421
Excellently positioned fronting
Situated on the Madford onto the A505, the main arterial Milton Keynes
Retail Park, 2 miles north west
route which leads directly from
of Luton Town Centre, 20 miles
south east of Milton Keynes the M1 (J11), 1 mile to the west, to A6
the centre of Luton
M11
A5 A10
Two adjoining modern glazed
showrooms, refurbished in 2016 Stevenage
Floor Area: 37,400 sq ft
Luton
80 display bays (293 in total) Site Area: 2.3 acres A41 A418
11
Workshops and large parking (29% site coverage)
provisions A1(M)
Aylesbury
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
Site Plan.
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 reflect an attractive Net Initial Yield of 5.25% and a low capital value
of £148 per sq ft, after deducting purchasers costs of 6.61%.
*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
Local
11
7
Occupiers.
8
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. Screwfix TO M1 (J11)
13. SH Pratt Group
14. Bestway Cash & Carry
15. Toyota
16. Vauxhall
17. London Luton Airport
BMW & MINI � 5 01 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
Franchise Information.
Rating 4A1), and are one of the largest privately owned Accommodation Sq M Sq Ft
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
TURNOVER £36,029,404 £37,689,599 £37,483,646 FIRST FLOOR:
from 2.7% in the previous year. BMW sold 172,048 new cars in 2018,
placing them 5th in the UK by market share, and Mini sold 67,021 PROFIT /(LOSS) Office Areas & Ancillary 783 8,431
-£356,240 -£502,648 -£462,377
new cars, placing them 14th. BEFORE TAX
TANGIBLE NET TOTAL GIA 3,474 37,400*
- - -
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
A D U LT CATC H M E N T
P O PU L AT I O N
Dealerships. A5
Luton & Sundown
Industrial Estate 5 MIL E S
North Luton 4 00,000
Industrial Estate
1 0 MIL E S
F R A NCHI SE - DEALER
Cradock
Industrial Estate
675 ,000
A505 5
1. Citroen & Subaru - Slip End
M1
Sovereign
Garages TOTA L P O PU L AT I O N
3 Park
E A R N I N G £20,0 0 0 + PA
2. Ford - Hartwell Cosgrove London
8 Industrial Estate (AGE 18+ YE ARS)
3. Hyundai - Perrys
LUTON Luton
Airport
2 Royal London 6 7
Mall M1 5 MIL E S
4. Mazda & Kia - Brayley
Firbank & Dalroad 8 4 ,000
The Business Centre
5. Kia - Grovebury Cars Industrial Estates & Barratt Industrial 1 0 MIL E S
6. Toyota - Steven Eagell A5183 Park 202 ,000
1 Capability Green
7. Vauxhall - Thurlow Nunn Business Park
8. Vauxhall - Thurlow Nunn M1
D R IVE T I M E TO N E A R E ST
TOWN S / C I T I E S
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 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 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, 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
BMW & MINI • 5 01 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
a roundabout of the A505, the dealership offers excellent visibility
Rateable Value.
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
major cities being adjacent to the M11, and only minutes from the M25
EPC.
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, Kwik Fit 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 8QNVat & 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: lzielinski@geraldeve.com E: vsmith@geraldeve.com E: pscott@geraldeve.com
Bill Bexson Eddie Highnam
T: +44 (0)203 588 7200 T: +44(0)203 588 7200
Proposal.
M: +44 (0)7831 827 442 M: +44 (0)7733 535 952
E: bbexson@automotive-property.com E: ehighnam@automotive-property.com
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
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