OPPORTUNITY TO ACQUIRE A PORSCHE …...Stockport is a major satellite town within the Greater Manchester conurbation with an extensive total population of 283,300. The town is situated

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RARE FORWARD COMMITMENT OPPORTUNITY TO ACQUIRE A PORSCHE CAR SHOWROOM WITH LONG LET, RPI LINKED REVIEWS

INVESTMENT SUMMARY

• A rare forward commitment opportunity for a new Porsche dealership in a key territory

• Prominently located, visible from the M60 Motorway, 0.5 miles north east of Stockport town centre

• A new c. 43,800 sq ft prime car dealership for one of the UK’s most prestigious franchises

• Situated adjacent to a Tesco superstore, in close proximity to numerous car dealerships with excellent connectivity

• The Porsche dealership will be let for a term of 15 years to Pendragon Sabre Ltd, with a guarantee from Pendragon plc (D&B rated 5A1), the UK’s third largest dealer group by turnover

• The property will be let for a term of 15 years from practical completion with a tenant’s option to extend for a further 10 years

• 5 yearly RPI linked annually compounded rent reviews (1% collar & 3% cap)

• An initial rent of £742,500 per annum (£16.95psf)

• Freehold

• Construction has recently commenced and has an anticipated completion date in February 2020

We are instructed to seek a forward commitment to purchase based on a £6,000,000 site acquisition with a balancing payment upon practical completion based on a total purchase price of £11,500,000 (Eleven Million, Five Hundred Thousand Pounds) subject to contract and exclusive of VAT. A purchase at this level reflects a Net Initial Yield of 6.00%, assuming full purchaser’s costs of 7.71%.

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< >1INVESTMENT SUMMARYLOCATION SITUATIONDESCRIPTION

ACCOMMODATIONPARKINGSITE AREAPLANNING

TENURETENANCYPORSCHE BRANDPENDRAGON COVENANT

AUTOMOTIVE PROPERTY INVESTMENTDEVELOPMENT TIMELINEPROFESSIONAL TEAMENIRONMENTAL

CAPITAL ALLOWANCESDATA ROOM & VATANTI MONEY LAUNDERINGCONTACTS

LOCATION

Didsbury

Marple

Bredbury

Manchester Airport

Hazel Grove

Altrincham

UrmstonHyde

Ashton-under-Lyne

MossleyNewtonHeath

Oldham

Salford

Castlefield

Stockport is a major satellite town within the Greater Manchester conurbation with an extensive total population of 283,300. The town is situated 7 miles (11 km) south east of Manchester city centre, 47 miles (76 km) south west of Leeds, 85 miles (136 km) north of Birmingham and 200 miles (321 km) north west of London.

The town, together with its suburbs such as Bramhall and Heaton Moor, is one of Greater Manchester’s strongest and most affluent areas with a robust economy, a strong quality of life and bolstered by fast access to areas of Cheshire and Derbyshire. Stockport has developed centres of high-value employment and attracts significant commuting flows in from the rest of Greater Manchester and its surrounding districts, leading to mutually beneficial economic relationships and a high proportion of urban wealthy executives.

The town benefits from excellent road connections being adjacent to the M60 (Junction 27) which forms the Manchester Outer Ring Road and links with the M56, M62, M61, M67 and the wider national motorway network. The A6 runs north-west to south-east from Manchester to Derby and beyond.

Stockport railway station is located approximately 1.5 miles (2.4 km) to the south west of the property and serves as a main interchange for both regional and national services. Stockport provides direct services into Manchester within 7 minutes, Birmingham in 1 hour 20 minutes and London Euston in 2 hours.

Manchester Airport, located 8 miles (12.6 km) to the north east of the property, is the UK’s third busiest airport with 28.2 million passengers recorded in 2018.

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SAT NAV: SK1 2BT

Stockport

A56026

B6104

A626

A560

A626A6

B5465

B6167

B6167

27Mersey Street

St Mary’s Way

Great Portwood Street

A6

M60

M60

M60

M60

M62

A34

A34

A6

A57

A62

A5103 A560

A580A576

A56

A57 A635A635

A523

A6010

M602

Stockport

25

24

23

1

3

5

7

9

21

12

A6

A56

Manchester

Marsland Street

Water Street

Tiviot Way

Stockport Road West

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INVESTMENT SUMMARYLOCATION SITUATIONDESCRIPTION





SITUATION DESCRIPTION

The site is strategically split over two adjacent sites with the main dealership prominently situated fronting the M60 motorway, to the west of Junction 27 where the M60 meets the A560 and the A626. The property lies half a mile (0.8 km) north east of Stockport town centre and is accessed from Marsland Street and Water Street.

The proposed main dealership site is located off Marsland Street as is the southern most out of the two sites. This site is bound to the south by the elevated M60 motorway. To the north and east of the site is a large Tesco Extra with a petrol filling station and associated parking.

To supplement the dealership facility, the adjacent site to the north west will be used to accommodate a vehicle preparation facility and car compound. This site is bound to the east by Water Street.

Access to the both sites can be made from either Junction 27 of the M60 via Tiviot Way and Water Street or alternatively from Marsland Street direct from the A560 and Stockport Town Centre.

The surrounding area predominantly comprises a well established out of town retail, leisure and dealership destination with Land Rover, Infiniti, Volvo and Kia all situated within close proximity to the subject property. Located off J1 of the M60 is Europe’s largest Mercedes-Benz dealership which opened in July 2019 and comprises c. 300,000 sqft of showroom, workshop and ancillary. Opposite the junction to Marsland Street to the south of the property is the successful Peel Centre Shopping Park with tenants including DFS, Currys/PC World, Next, New Look, Hobbycraft, Home Bargains, Matalan, Gap Outlet, H&M, Argos, Boots and Dunelm.

The location benefits from excellent public transport links, with a regular bus service to Stockport City Centre and the wider region. The nearest bus stop to the site is within a two minute walk on Marsland Street providing services to Stockport at frequent intervals and Ashton-Under-Lyne at half hourly intervals.

Porsche focus on providing a high level of customer experience, and this demands specific requirements from their retail facilities. The 43,831 sq ft building has been designed in strict accordance with Porsche Corporate Identity requirements and the building shape closely mimics Porsche’s preferred curved design along with the feature ‘cut-out’ entrance.

The design has been orientated in order to take advantage of the prominent views onto the site from the M60 Motorway, as well as maintaining a primary viewpoint from the main customer entrance off Marsland Street.

On the main dealership site, the subject development will consist of a two storey, purpose built Porsche branded car dealership together with associated workshop and parking. The property showroom will be clad using metallic grey cladding panels, glazing will be provided to the showroom along the main curvature of the building and the back of house areas will be clad in full height dark grey trapezoidal cladding. Customers will have the benefit of two handover bays located on the primary elevation facing east along with a dedicated service parking canopy which will greatly enhance the customer experience.

Internally, the ground floor will comprise a luxury, part double height showroom with 17 display spaces, featuring a Specification Lounge, two handover bays, two Direct Dialogue bays, offices, 17 state-of-the-art double height workshop and MOT bays, parts storage, vehicle lift and ancillary accommodation. Externally there is a dedicated service parking canopy. The first floor will comprise a luxury showroom with a further 17 display spaces, featuring a Specification Lounge and hospitality area, offices, parts mezzanine, staff areas, vehicle lift and ancillary accommodation.

The adjacent site to the north west will be used to house a vehicle preparation facility and secure car compound for over 200 vehicles.

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ACCOMMODATION SITE AREA TENURE

TENANCY

PARKING

The property will provide the following approximate Gross Internal Areas.

AREA SQM SQ FT

Ground Floor

Showroom 1,077 11,593

Valet/Parts/Handover 580 6,243

Offices 104 1,119

Workshop 775 8,342

Ancillary 100 1,076

Workshop & Wash Bays (rear site)

72 775

Sub Total Ground Floor 2,708 29,149

First Floor

Showroom 856 9,214

Offices 226 2,433

Ancillary 245 2,637

Parts Mezz 37 398

Sub Total First Floor 1,364 14,682

Overall Total 4,072 43,831

The site is presented on two adjacent sites, separated by the intersection of Water Street and Marsland Street. The total site area extends to approximately 5.2 acres (2.1 hectares).

PLANNING

Planning was granted on the 2 April 2019 by Stockport Metropolitan Borough Council (ref: DC/070913) for a ‘motor vehicle dealership for the sale, service and MOT of new and used vehicles’. A copy of the planning consent is available on request.

The property is predominantly freehold with part of the northern site held on a 999 year lease from 30th March 1994 at nil rent.

The property will be let in its entirety on full repairing and insuring terms to Pendragon Sabre Limited with a guarantee from Pendragon Plc, for a term of 15 years from completion of the lease at an initial rent of £742,500 per annum, equating to £16.94 per sq ft. There will be a tenant’s option to extend the lease for a further 10 years. The rent will be reviewed 5 yearly subject to the Retail Price Index with a collar and cap of 1% and 3% per annum respectively.

Customer Parking

35 - inc 2 accessible bays and 2 EV bays + 2 motorcycle bays

External Display 25

Staff/Compound Parking

28 (inc 2 EV bays)

Compound 200 vehicles

TechEquip

ment Platform

MARSLAND STREET

WA

TER

STRE

ET

RIVE

R TA

ME

M60

Northern Site 2.96 acres (1.2ha)

Southern Site 2.22 acres (0.9ha)

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PORSCHE BRAND

Porsche is a German automobile manufacturer, specialising in performance cars, SUVs and saloons. It was founded in Stuttgart, Germany in 1931 and is part of Volkswagen AG. Porsche AG delivered 133,484 vehicles worldwide in the first half of 2019, recording a two per cent increase compared with the same period in 2018 proving the brands wide appeal.

The UK & Ireland are the fourth largest market for Porsche in the world with 34 Porsche centres across the UK, including Porsche Service Centres. The company sold 256,000 cars worldwide in 2018 with more than 12,500 vehicles in the UK.

Porsche has consistently been one of the most profitable motor manufacturers in the world, indeed it has often been regarded as a seller of luxury goods, not just motor vehicles. According to Bloomberg Data, the new Porsche 911 is the most profitable car of 2019 and the company made an average of €15,000 (£13,500) in profit on each of the cars it sold last year. In contrast the two other top German marques, BMW and Mercedes Benz make on average, across their range €4,400 (£4,000) per vehicle.

In its H1 financial results for the period to June 30 VW reported that the brand had achieved a 2.5% rise in profits to €2.1 billion (£1.87bn) as sales revenues rose 8.9%, from €11.2 billion (£9.98bn) to €12.2 billion (£10.88bn).

Porsche’s Mission E Concept will spawn the brand’s first all-electric model when the Taycan EV supercar reaches UK showrooms in late 2019.

The new showroom in Stockport represents an important part of Porsche’s nationwide coverage with the Greater Manchester conurbation representing a significant spend for the brand moving forward.

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PENDRAGON COVENANT AUTOMOTIVE PROPERTY INVESTMENT

Pendragon plc (company number 02304195) is the UK’s third largest dealership group with an annual turnover of £4.627bn (AM 100 June 2019). The business represents a variety of established brands at 177 franchised locations trading under two brands; Stratstone, one of the UK’s leading premium motor car retailers, and Evans Halshaw, one of the UK’s leading volume motor car retailers.

Stratstone holds franchises to retail and service 10 brands, including Aston Martin, BMW, Ferrari, Jaguar, Land Rover, Mercedes-Benz, MINI, Porsche, and Smart, as well as Harley-Davidson motorcycles.

Pendragon plc has a Dun and Bradstreet rating of 5A1 and the latest financial results are as follows:-

31/12/2018 31/12/2017 31/12/2016

(000s) (000s) (000s)

Sales Turnover £4,627,000 £4,739,100 £73,000

Profit/(Loss) Before Tax (£44,400)* £65,300 £73,000

Shareholders’ Funds £345,600 £414,600 £394,900

Net Current Assets £351,900 £418,000 £726,900

*NB – Impacted by a one off impairment of £88,000,000 relating to more conservative business forecasting. On a like for like basis, Profit Before Tax was £47,800,000.

Pendragon Sabre Limited (company number 03835999) has been in operation for 20 years and purely operates the Porsche businesses within the Pendragon Group.

Pendragon Sabre Limited has a Dun and Bradstreet rating of 2A1 and the latest financial results are as follows:

31/12/2017 31/12/2016 31/12/2015

(000s) (000s) (000s)

Sales Turnover £181,490 £139,781 £120,353

Profit/(Loss) Before Tax £6,747 £3,838 £3,655

Net Current Assets £6,100 £3,678 £4,159

Date Property Term (yrs) Tenant Rent Reviews Price (m) NIY

Subject Property Stockport Porsche 15 Pendragon Plc RPI 1% & 3% £11.5 6.00%

OTM York Jaguar Land Rover 24.2 Inchcape RPI 2 & 4% £13.06 4.50%

OTM Preston Volvo 20 (funding) Rybrook Ltd CPI 1% & 2% £5.36 5.25%

OTM Glasgow Mercedes-Benz 12.5 Pendragon plc Annual RPI £10.28 5.75%

Under Offer Leicester Bentley & Lamborghini 10.8 R Stratton & Co Ltd

(Sytner)Guaranteed

uplift £8.1 6.24%

Aug 19 Manchester Peugeot 8 Peugeot Motor Company (Peugeot SA) CPI 2% & 4% £5.87 5.38%

July-19 Croydon Mazda 5.6 Drift Bridge Garage Ltd OMRV £3.3 5.50%

May-19 Tunbridge Wells VW 6 VW Group UK Ltd OMRV £4.825 5.76%

April-19 Giffnock Mercedes-Benz 12.5 Pendragon plc Annual RPI £3.65 5.70%

April-19 Huddersfield Jaguar Land Rover

20 (funding) Rybrook Ltd RPI 1% & 2% £13 5.00%

April-19 City West Portfolio Mercedes-Benz 11.5 City West Limited OMRV £18.25 5.96%

April-19 Birmingham Ford 13.2 Bristol Street Limited £6.18 5.16%

Mar-19 Milton Keynes VW & Skoda 6 VW Group UK Ltd OMRV £8.15 5.98%

Jan-19 Newcastle Honda 15 Honda Motor Europe Ltd (Sub-let)

Fixed 2% pa 5 yearly £4.06 5.40%

Dec-18 Camberley VW 6.75 VW Group UK Ltd OMRV £5.2 5.20%

Aug 18 London BMW/Mini 15 Stephen James RPI 2 & 4% £46.1 3.97%

DEVELOPMENT TIMELINE

Works have commenced on site with a target Practical Completion date of 24th February 2020.

PROFESSIONAL TEAM

Contractor APPArchitect Unwin Jones Partnership Structural Engineer Eastwood Partners M&E Consultant BWB Consulting Quantity Surveyor DRC Consulting

A suite of collateral warranties will be made available to the purchaser upon completion from the Professional Team.

ENVIRONMENTAL

A Phase II environmental report is available upon request.

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CONTACTS

For further information or to arrange an inspection, please contact:

Martin Carey020 7255 [email protected]

Rebecca Harper020 7255 [email protected]

Jonny Doulton020 7255 [email protected]

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 Members is available on our website or at any of our offices during normal business hours. Rapleys LLP operates an Environmental Management System which complies with the requirements of ISO 14001:2004. Regulated by RICS. Any maps are for identification purposes only and 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 2001. Licence No. 100017302 and © Crown Copyright. All rights reserved. Licence No. ES 100004619. Misrepresentation Act: 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 of a contract. No person in the employment of Rapleys or their joint agents has authority to give any representation or warranty in respect of this property. All prices or rents are quoted exclusive of VAT. September 2019. carve-design.co.uk 14263

CAPITAL ALLOWANCES

The benefit of any capital allowances will be transferred as part of the proposed sale. Further details are available upon request.

PROPOSAL

We are instructed to seek a forward commitment to purchase based on a £6,000,000 site acquisition with a balancing payment upon practical completion based on a total purchase price of £11,500,000 (Eleven Million, Five Hundred Thousand Pounds) subject to contract and exclusive of VAT. A purchase at this level reflects a Net Initial Yield of 6.00%, assuming full purchaser’s costs of 7.71%.

DATA ROOM

Data room access is available upon request.

VAT

The property has been elected for VAT. It is anticipated that the transaction will not be treated as a Transfer of a Going Concern (TOGC).

ANTI-MONEY LAUNDERING POLICY

In accordance with the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, the Purchaser will be required to comply with our Anti-Money Laundering policy. Further details are available upon request.

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OPPORTUNITY TO ACQUIRE A PORSCHE …...Stockport is a major satellite town within the Greater Manchester conurbation with an extensive total population of 283,300. The town is situated