PRIME DEALERSHIP INVESTMENT WITH RPI LINKED REVIEWS

1 S T. M A RY S WA Y

S TO C K P O R T | S K 1 2 H Y

PRIME DEALERSHIP INVESTMENT WITH RPI LINKED REVIEWS

02

INVESTMENT SUMMARY

LOCATION

DEMOGRAPHICS

SITUATION

DESCRIPTION

ACCOMMODATION

PLANNING

TENURE

TENANCY

COVENANT INFORMATION

DEALERSHIP MARKET

VAT

EPC

DATA ROOM

PROPOSAL

FURTHER INFORMATION

STOCKPORT

VOLVO

1 ST. MARYS WAY • STOCKPORT • SK1 2HY

< >

Investment Summary

• Recently completed, state of the art facility situated within a prime dealership location

• Prominently situated fronting Portwood Roundabout & Junction 27 of the M60 motorway

• Located within an extensive catchment area which forms a key territory for both the manufacturers and dealer network groups

• Purpose built Volvo car showroom comprising a total of 15,650 sq ft (1,454 sq m) of accommodation

• Let to Volvo Car UK Limited, an established manufacturer covenant with an annual turnover in excess of £1.3 billion (Dec 18)

• Tenure - Long Leasehold - 125 year lease from 23rd August 2019 at a current rent of £40,350 pa with 5 yearly rent reviews

• New 20 year lease, with 5 yearly rent reviews linked to the Retail Price Index (RPI), capped and collared at 3.5% and 2% per annum compounded annually

• Initial passing rent of £275,000 per annum, reflecting £17.57 per sq ft providing a net rent of £234,650 pa

We are instructed to seek offers in excess of £3,600,000 (Three Million, Six Hundred Thousand Pounds), subject to contract and exclusive of VAT. A purchase at this level reflects a Net Initial Yield of 6.12%, assuming purchaser’s costs of 6.5%.

03

INVESTMENT SUMMARY

LOCATION

DEMOGRAPHICS

SITUATION

DESCRIPTION

ACCOMMODATION

PLANNING

TENURE

TENANCY

COVENANT INFORMATION

DEALERSHIP MARKET

VAT

EPC

DATA ROOM

PROPOSAL

FURTHER INFORMATION

STOCKPORT

VOLVO

1 ST. MARYS WAY • STOCKPORT • SK1 2HY

< >

Location

Stockport is a major satellite town within the Greater Manchester conurbation with an extensive total population of 283,300.

Stockport benefits from excellent road infrastructure being situated 7 miles (11.5 km) south east of Manchester city centre, off Junction 27 of the M60 orbital motorway. The M60 forms the Manchester Outer Ring Road and links with the M56, M62, M61, M67 and the wider national motorway network. Access to the city centre is provided via the A6 and serves as the most direct route from Manchester to Derby.

The town is served by Stockport railway station which is located approximately 1.5 miles (2.4 km) to the south west of the site and serves as a main interchange for both regional and national services. Fastest journey times from Stockport to Manchester are approximately 7 minutes, Birmingham in 1 hour 20 minutes and to 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 25.6 million passengers recorded in 2016.

Didsbury

Marple

Manchester Airport

Hazel Grove

Altrincham

UrmstonHyde

Ashdton-under-Lyne

Glossop

Mossley

Adlington

Disley

Buxton

Hayfield

NewtonHeath

Oldham

Salford

Castlefield

SAT NAV: SK1 2HY

M60

Stockport

A56026

B6104

A626

A560

A626A6

B5465

B6167

B6167

M60

M60

27Mersey Street

St Mary’s Way

A6

M60

M60

M60

M62

A34

A34

A6

A57

A62

A5103 A560

A580A576

A56

A57 A635A635

A523

A6010

M602

Bredbury

Stockport

25

24

23

1

3

5

7

9

21

12

A6

A56

Manchester

04

INVESTMENT SUMMARY

LOCATION

DEMOGRAPHICS

SITUATION

DESCRIPTION

ACCOMMODATION

PLANNING

TENURE

TENANCY

COVENANT INFORMATION

DEALERSHIP MARKET

VAT

EPC

DATA ROOM

PROPOSAL

FURTHER INFORMATION

STOCKPORT

VOLVO

1 ST. MARYS WAY • STOCKPORT • SK1 2HY

< >

The total population within Stockport’s primary catchment area is 535,000, ranking the city 34 out of the PROMIS centres and ensures Stockport forms a substantial and key territory for both manufacturers and the dealer network groups alike.

Stockport Metropolitan Borough Council identifies the town as one of the most successful local economies in Greater Manchester with 125,000 people working in 11,000 businesses and more than 2 million people living within a 30-minute drive time.

The demographic profile of the local area is moderately affluent with levels of home and car ownership in line with the national average.

Demographics

05

INVESTMENT SUMMARY

LOCATION

DEMOGRAPHICS

SITUATION

DESCRIPTION

ACCOMMODATION

PLANNING

TENURE

TENANCY

COVENANT INFORMATION

DEALERSHIP MARKET

VAT

EPC

DATA ROOM

PROPOSAL

FURTHER INFORMATION

STOCKPORT

VOLVO

1 ST. MARYS WAY • STOCKPORT • SK1 2HY

< >

The property is prominently situated fronting the Portwood Roundabout to the north, which connects the A560 and Junction 27 of the M60 motorway, and St. Marys Way to the west (A626), serving as a main arterial route into the town centre. The property is accessed from St Marys Way and lies one mile (1.6 km) east of Stockport town centre.

The surrounding area predominantly comprises a well established out of town retail, leisure and dealership destination with Land Rover, Infiniti, Porsche, Nissan 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 sq ft of showroom, workshop and ancillary.

Situation

06

INVESTMENT SUMMARY

LOCATION

DEMOGRAPHICS

SITUATION

DESCRIPTION

ACCOMMODATION

PLANNING

TENURE

TENANCY

COVENANT INFORMATION

DEALERSHIP MARKET

VAT

EPC

DATA ROOM

PROPOSAL

FURTHER INFORMATION

STOCKPORT

VOLVO

1 ST. MARYS WAY • STOCKPORT • SK1 2HY

< >

Description

The subject property comprises a recently completed purpose built state of the art dealership constructed in accordance with the manufacturer’s latest corporate requirements and franchise standards.

The property is of steel frame construction with full height glazing to the showroom with clad rear elevations and workshop under a pitched roof. The accommodation is arranged over ground and first floor level with extensive external parking comprising a total GIA of approximately 15,650 sq ft (1,454 sq m).

The showroom is fitted to a high specification throughout providing nine display spaces, suspended ceilings with extensive lighting and overhead ventilation system. The unit is completed to a very high standard in line with the new “Volvo experience” concept. Offset from the showroom, there is a customer waiting area and office accommodation. The workshop area is configured to provide a total of seven service bays and one MOT service bay with inspection pits, roller shutter doors and an exhaust extraction system. There is a further parts store and ancillary accommodation. The first floor comprises meeting rooms, WC’s, tyre store, offices, staff area and ancillary.

Externally, there is a detached wet and dry valet area and a total of 135 car parking spaces including 66 display car parking spaces, 18 customer car parking spaces, 9 demonstrator spaces and a gated compound with capacity for 42 vehicles.

07

INVESTMENT SUMMARY

LOCATION

DEMOGRAPHICS

SITUATION

DESCRIPTION

ACCOMMODATION

PLANNING

TENURE

TENANCY

COVENANT INFORMATION

DEALERSHIP MARKET

VAT

EPC

DATA ROOM

PROPOSAL

FURTHER INFORMATION

STOCKPORT

VOLVO

1 ST. MARYS WAY • STOCKPORT • SK1 2HY

< >

Accommodation

CAR PARKING NUMBER OF SPACES

Display Vehicles 45

Compound 63

Customer 18

Demonstrator 9

Total 135

ACCOMMODATION SQ M SQ FT

Ground Floor

Showroom 504 5,425

Showroom Offices 99 1,066

Workshop Service Area 294 3,165

Parts Store 37 398

Parts Issue 43 463

Ancillary 107 1,152

Wet Valet 70 753

Dry Valet 68 732

Total Ground Floor 1,222 13,153

Total First Floor 232 2,497

Total 1,454 15,651

MER

SEY STREET

ST MARYS WAY

08

INVESTMENT SUMMARY

LOCATION

DEMOGRAPHICS

SITUATION

DESCRIPTION

ACCOMMODATION

PLANNING

TENURE

TENANCY

COVENANT INFORMATION

DEALERSHIP MARKET

VAT

EPC

DATA ROOM

PROPOSAL

FURTHER INFORMATION

STOCKPORT

VOLVO

1 ST. MARYS WAY • STOCKPORT • SK1 2HY

< >

TenancyThe property is let in it’s entirety to Volvo Car UK Limited, on a full repairing and insuring lease for a term of 20 years from completion of the sale, at an initial passing rent of £275,000 per annum, equating to approximately £17.57 per sq ft.

Rent reviews are five yearly and linked to the Retail Price Index, capped and collared at 3.5% and 2% per annum respectively, compounded annually.

The net effective rent for the property is £234,650 per annum.

The property is underlet to Lookers Motor Group Limited on mirror lease terms who operate the dealership.

Covenant InformationVolvo Car UK Limited forms part of the Volvo Group which is ultimately owned by Zhejiang Geely Holdings Group, a Chinese multinational automotive manufacturing company.

The Volvo franchise is one of the fastest growing retail brands in the UK and the company is currently progressing a major expansion and upgrade programme of its existing facilities to bring them in line with the latest corporate standards. This is a customer focused strategy to provide what they term the ‘Volvo experience’ which focuses on innovative Scandinavian design and providing flexible accommodation.

This substantial investment drive underlines the importance of the UK car market, where Volvo continue to increase their market share selling 48,069 units year-to-date, which reflects a 14.33% increase from 2018. This strong performance, in part, reflects the success of Volvo’s range of premium models with the XC90, XC60 and V40 performing particularly well. This strong UK performance helped Volvo Cars achieve a fifth consecutive year of record sales, selling 642,253 cars globally in 2018, a 12.4% increase compared with the same period in the previous year.

The latest financial results for Volvo Car UK Limited are set out below:

Dec 2018 Dec 2017 Dec 2016

Sales Turnover £1,297,496,000 £1,095,862,000 £1,029,587,000

Profit / (Loss) Before Tax £3,751,000 £1,364,000 £2,558,000

Tangible Net Worth £18,813,000 £15,467,000 (£4,996,000)*

Net Current Assets (Liabilities) £10,330,000 £8,882,000 £24,758,000

*The movement from net assets into net liabilities was driven by an actuarial valuation of the company’s defined benefit pension scheme.

PlanningPlanning (ref: DC/062434) was granted on 12th January 2017 for the erection of a vehicle dealership comprising a showroom, workshop and ancillary accommodation, external car parking and vehicle display.

TenureLong Leasehold - 125 years from 23rd August 2019 at a current passing rent of £40,350 per annum with 5 yearly rent reviews to Open Market Value on a vacant land basis.

09

INVESTMENT SUMMARY

LOCATION

DEMOGRAPHICS

SITUATION

DESCRIPTION

ACCOMMODATION

PLANNING

TENURE

TENANCY

COVENANT INFORMATION

DEALERSHIP MARKET

VAT

EPC

DATA ROOM

PROPOSAL

FURTHER INFORMATION

STOCKPORT

VOLVO

1 ST. MARYS WAY • STOCKPORT • SK1 2HY

< >

Dealership Market

FUTURE TRENDS

With the Government recently announcing plans to ban all new petrol and diesel cars and vans from 2040, a number of manufacturers have recently set out their strategies to move to electric vehicles. Whilst only 37,000 of the estimated 26m cars on British roads are pure electric, this figure is anticipated to increase significantly over the next few years, with some projections estimating that electric models will make up 35% of all new car sales by 2040.

Volvo have been at the forefront of this fundamental change, having been the first manufacturer to announce their plans to go fully electric. The company has recently confirmed that all new cars launched by Volvo from 2019 onwards will be partially or completely battery-powered.

Between 2019 and 2021, the company will introduce five 100% electric models and plans to ensure all other models have a hybrid engine. In doing so, Volvo have recognised the significant gains to be made by leading the way in electric vehicles and are therefore particularly well placed to benefit from the inevitable transition from petrol and diesel vehicles in the foreseeable future.

Most recently, Volvo are offering one year of free electricity to all British buyers of its new Volvo plug-in hybrid models.

10

INVESTMENT SUMMARY

LOCATION

DEMOGRAPHICS

SITUATION

DESCRIPTION

ACCOMMODATION

PLANNING

TENURE

TENANCY

COVENANT INFORMATION

DEALERSHIP MARKET

VAT

EPC

DATA ROOM

PROPOSAL

FURTHER INFORMATION

STOCKPORT

VOLVO

1 ST. MARYS WAY • STOCKPORT • SK1 2HY

<

Further InformationRebecca Harper020 7255 8040 rebecca.harper@rapleys.com

Jonny Doulton020 7255 8099 jonny.doulton@rapleys.com

Martin Carey020 7255 8085 martin.carey@rapleys.com

VATThe property has been elected for VAT purposes and it is anticipated that the transaction will be treated as a Transfer of a Going Concern (TOGC).

Anti-Money Laundering PolicyIn 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.

EPCThe property has an EPC rating of B27.

ProposalWe are instructed to seek offers in excess of £3,600,000 (Three Million, Six Hundred Thousand Pounds), subject to contract and exclusive of VAT. A purchase at this level reflects a Net Initial Yield of 6.12%, assuming purchaser’s costs of 6.5%.

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. January 2020. Design by carve-design.co.uk 14219.