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TERMINUS ROAD • CHICHESTER • PO19 8TX

Volkswagen

VOLKSWAGEN • TERMINUS ROAD, CHICHESTER, PO19 8TX2

Situated in Chichester’s primary car retail and trade location, 2 miles south west of the city centre and 15 miles east of Portsmouth

Located off the A27, the main arterial route along the South East Coast running between Portsmouth to the west and Brighton 3.1 miles to the east

Large showroom39 display bays (111 total bays)Parts storage and showroom to the rear

Floor Area: 26,210 sq ftSite Cover: 1.00 acres (28% site coverage)

Single let to Peter Cooper Motor Group Limited AWULT: 13.1 yrs (to expiry)

Marketing Rent: £160,000 pa (£5.03 psf) 5 yearly rent reviews to OMR

Tenure: Long Leasehold (2 leases both with 129 years unexpired at £6,337.34 pa subject to review)

New trade counter scheme in close proximity (Ravenna Point)

Chichester

Bognor Regis

West Ashling

Walderton Binderton

Boxgrove

SingletonUpwaltham

Eartham

Westergate

Tangmere

Colworth

Sidlesham

Southbourne

West Marden

Finchdean

East Lavant

Runcton

Bindham

Barnham

A3(M)

A3

A27 A27A27

A27

A250

West MardenWest Marden

FinchdeanFinchdeanFinchdean

A3(M)Investment Summary. Location.

Site

Pla

n.

£

ProposalWe are instructed to seek offers for the freehold interest in excess of £2,020,000 subject to contract and exclusive of VAT. A purchase at this level would refl ect an attractive Net Initial Yield of 7.25% and a low capital value of £77 per sq ft, after deducting purchasers costs of 6.28%.

*boundary for indicative purposes only

VOLKSWAGEN • TERMINUS ROAD, CHICHESTER, PO19 8TX 3

34 5

67

89

1011

12

1314

16

17

1820

21

A259

TERMINUS ROAD

A27CHICHESTER BYPASS

TO PORTSMOUTH

215

Outline Planning Application for 9 warehouse units

(18/01126/OUT)

1

TO BRIGHTON

1. Ford2. Jaguar / Land Rover / Aston

Martin3. Gemini Data Loggers4. St Wilfred’s Hospice Furniture

Outlet5. West Sussex Fire & Rescue

Technical Support Centre6. Jewson7. The Tread Shop8. Premier Inn, Cineworld, Ten

Pin9. Princes10. Milk & More Delivery Hub

11. Dairy Crest12. Motoforce13. R&D Motors MOT, Chichester

Tyre & Brake Centre14. Enterprise Rent a Car15. Skoda16. Sentry Self Storage17. Deltex Medical18. Loc’n Store19. Tesco20. Chichester Enterprise Centre21. Waitrose22. Ravenna Point Trade Scheme

Local Occupiers.

CHICHESTERTOWN CENTRE

University ofChichester

CHICHESTER STATION

Chichester Southern GatewayRegeneration of 30 acres of

brownfi eld sites

19

22

VOLKSWAGEN • TERMINUS ROAD, CHICHESTER, PO19 8TX4

Tenancy Information.

Property Tenant Name Total Area Sq Ft

Lease Start

Lease Expiry

Break Option

Next Review

Rent review mechanism

Contracted Rent pa

Contracted Rent psf*

Volkswagen Terminus Road, Chichester, PO19 8TX

Peter CooperMotor Group Limited

26,210 17-Apr-2012 16-Apr-2032 25-Mar-2027 25-Mar-2022 OMR 5 yearly £160,000 £5.03

Franchise Information.

Rent Review Provision.

Accommodation Sq M Sq Ft

GROUND FLOOR:

Showroom, Sales Offices &Ancillary Areas

656 7,065

Workshops & Ancillary Areas 486 5,228

FIRST FLOOR:

Office Areas 182 1,965

Ancillary & Car Deck 1,111 11,952

TOTAL GIA 2,435 26,210

Display Parking 39

Customer & Additional Parking 72

TOTAL PARKING 111 SPACES

Volkswagen Passenger Cars is part of the Volkswagen Group (also known as Volkswagen AG), a holding company for 12 twelve brands from 7 European countries, including Audi, Porsche, Bentley, Bugatti, Lamborghini and Ducati. In the UK, Volkswagen has a market share of 8.6% (Dec 2018), an increase on the 2017 figure of 8.2%. In 2018 they sold 203,133 new cars and are ranked 2nd in terms of market share.

The Volkswagen Golf was the 2nd best-selling car of 2018 with 64,829 new registrations, whilst the Volkswagen Polo was the UK’s 6th best-selling with 45,149 new registrations. With the growing demand for zero emission travel, Volkswagen has developed the electric e-Golf, due for release in 2019. Volkswagen Group have also committed to investing £30 billion into technology including electric vehicles and autonomous driving systems over the next 5 years.

Rent is reviewed every 5 years, with the next review in March 2022, and is calculated as the higher of the rent payable immediately prior to the next review data or the rack rental value of the premises on the next review date.

The building has been measured in accordance with the RICS Code of Measuring Practice (Sixth Edition) and provides the following Gross Internal Areas:

Accommodation.

*Rent psf apportioned on the basis that external car display bays and compounds are rentalised separately. Rental breakdown available on request.

Covenant.Peter Cooper Motor Group Limited (D&B Rating 2A2), is one of the leading Volkswagen experts on the South Coast.

A Financial Summary for Peter Cooper Motor Group Limited is set out below:

PETER COOPER MOTOR GROUP LTD 31-Dec-15 31-Dec-16 31-Dec-17

TURNOVER £74,835,558 £76,862,471 £83,951,150

PROFIT /(LOSS) BEFORE TAX £264,912 -£553,776 -£56,658,000

TANGIBLE NET WORTH £2,554,525 £2,077,592 £1,982,545

BOGNOR REGIS

CHICHESTER

Terminus RoadIndustrial Estate

ShopwhykeIndustrial Estate

PartfieldRetail Park

Quarry LaneIndustrial Estate

Part FieldIndustrial Estate

A27

A27

A259A27

A27

Nearby Dealerships.

1. Aston Martin & Jaguar - Harwoods

2. Citroen, Toyota, Mazda, Peugeot - Snows

3. Ford - Hendy

4. Honda- Yeomans

5. Kia - Slated Barn

6. Mercedes - Marshall

7. Nissan - Yeomans

8. Skoda - Azur

FRANCHISE - DEALER

ADULT CATCHMENT POPULATION

% OF TOTAL POPULATION EARNING £20,000+ PA (AGE 18+ YEARS)

5 MILES

5 MILES

10 MILES

10 MILES

60,000

50%

200,000

44%

18

5

4

7

6

23

DRIVE TIME TO NEAREST TOWNS / CITIES

PORTSMOUTH 15 MINUTES(14 MILES)

PETERSFIELD 25 MINUTES(17 MILES)

WORTHING 30 MINUTES(17 MILES)

SOUTHAMPTON 45 MINUTES(35 MILES)

BRIGHTON 1 HOUR(31 MILES)

CRAWLEY 1 HOUR(40 MILES)

VOLKSWAGEN • TERMINUS ROAD, CHICHESTER, PO19 8TX6

Automotive Market Commentary.

0%

Less than 3 years old

4-6 years old

7 years old +

30%10% 40%20% 60%

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 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.

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 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 shift in the automotive market. The majority of manufacturers now expect that a quarter of sales will be from EVs by 2023, as emphasised by average waiting times with orders for a new factory ordered cars now taking 10-12 weeks, whilst wait times for EVs are often reported to be in excess of 6 months.

Some dealerships are looking to reposition their properties by proactively rolling out enhanced and consumer focussed aftersales services. The main determinant of this market is the number of vehicles on the road, which has risen 0.9% over 2018 to 34.6 million vehicles.

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.

THE BREAKDOWN OF UK CARS ON THE ROAD BY CAR AGE (2018)

VOLKSWAGEN • TERMINUS ROAD, CHICHESTER, PO19 8TX 7

2013 2018

Average Rent £ psf £13.55 psf £14.14 psf

Average Rent Overall £310,609 pa £335,415 pa

Average Yield 6.46% 5.55%

Prime Yield 4.98% 3.98%

Average Unexpired Lease Term 17.1 yrs 12.5 yrs

Average Lot Size £4,764,109 £6,221,200

Average SQ FT 23,279 sq ft 24,297 sqft

Average Site Density 26% 34%

% of RPI Transactions 77% 62%

The Automotive Investment Market.

Automotive property has been an ever-growing and attractive asset class for investors who are often attracted by prominent, well connected real estate with substantial unexpired lease terms to robust covenants who have incurred considerable expenditure on the assets.

The automotive market has consolidated over the past 10 years following a flurry of M&A activity. 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.

The growing investor interest in the automotive sector has resulted in the car dealership market 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 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 property companies focusing on automotive investment opportunities. As the weight of money being 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 up, reinforcing the attraction of the sector to institutional investors.

THE EVOLUTION OF CAR SHOWROOM INVESTMENTS

INVESTMENT COMPARABLES

PROPERTY FLOOR AREA (SQ FT) ACRES TENANT(S)

UNEXPIRED LEASE TERM

(YRS)RENTAL RENTAL

(PSF) PRICE NIY COMMENTS DATE

Bristol (Cribbs Causeway) Jaguar Land Rover 73,196 - Guy Salmon Limited 20 £1,136,000 £15.52 £24,000,000 4.43% Off market forward funding,

5 yearly RPI Reviews Dec-18

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 Land Rover 58,000 -  Rybrook Vehicles Ltd 20 £700,000 £12.07 £13,000,000 5.00% Forward funding,

5 yearly RPI Reviews Aug-18

Newcastle Upon Tyne Vauxhall 30,282 3.26 Vertu Motors (VMC) Limited 15 £416,514 £13.75 £7,000,000 5.58% 5 yearly Fixed uplifts Aug-18

Wolverhampton BMW & MINI 60,582 3.49 Rybrook Vehicles Ltd 20 £750,000 £12.38 £15,000,000 4.64% 5 Yearly RPI Reviews Jun-18

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

Large car showroom with offices and a car deck fronted with a good sized display yard, and parts storage, workshop and additional parking provisions to the rear with a site coverage of 28%.

The locality has a strong mix of car dealership occupiers including Aston Martin, Jaguar, Land Rover, Ford, Skoda, Andrew Page, Motorforce, and Enterprise Rent-A-Car. Other established occupiers include Jewson, Wolseley, Howdens, ATS, Dairy Crest, Cineworld, Premier Inn, Gourmet Burger Kitchen, Dominos and Nandos.

The city has excellent road connections being situated adjacent to the A27 dual-carriageway, providing excellent connections along the South Coast between Worthing and Brighton to the east, and Portsmouth and Southampton to the west, and connecting with the M27 and M3 motorways.

Chichester is an affluent city on the South Coast, located 15 miles east of Portsmouth, and 65 miles south of London. The city is well connected by road and rail, with Chichester train station 0.5 miles to the east and Gatwick Airport in close proximity 46 miles to the north east.

The unit fronts Terminus Road and is located at the heart of Terminus Road Industrial Estate, an established industrial and trade location benefitting from attractive population demographics.

Let to Peter Cooper Motor Group Limited (D&B Rating 2A2), with a low passing rent of £5.03 psf. The next review is in March 2022 and we anticipate a strong rental uplift at this review.

Terminus Road neighbours the £180 million Chichester Southern Gateway zone, a 30-acre brownfield regeneration project. When complete this will significantly enhance the connectivity and attraction of the location for customers, further increasing the area’s affluence.

VOLKSWAGEN • TERMINUS ROAD, CHICHESTER, PO19 8TX8

Investment Rationale. Tenure.

Rateable Value.

EPC.

The property is held under two leases with 129 years unexpired on both. The current ground rent is £6,337.34 pa. The occupational lease allows the landlord to recharge £8,000 pa to the tenant for the ground rent.

We are advised that the property is assessed in the 2017 Valuation List as “Car Showroom & Premises”. Rateable Value £222,000.

Rating of C66

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

Vat & TOGC.

Data room access can be provided upon request.

Data Room.

Freehold

Tenure.

Proposal.

We are instructed to seek offers for the freehold

interest in excess of £2,020,000 subject to contract

and exclusive of VAT.

A purchase at this level would reflect an attractive Net Initial Yield of 7.25% and a low capital value of £77 per sq ft, after deducting purchasers costs of 6.28%.

Key Contacts.+44 (0)203 486 3468+44 (0)7980 809031lzielinski@geraldeve.com

T:M:E:

Leo Zielinski+44 (0)203 486 3476+44 (0)7740 862 511vsmith@geraldeve.com

T:M:E:

Vicky Smith+44 (0)203 486 3460+44 (0)7342 051 757dpage@geraldeve.com

T:M:E:

Phil Scott

+44 (0)203 588 7200+44 (0)7831 827 442bbexson@automotive-property.com

T:M:E:

Bill Bexson+44(0)203 588 7200+44 (0)7733 535 952ehighnam@automotive-property.com

T:M:E:

Eddie Highnam

Conditions under which these particulars are issuedAll 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.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.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.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.

The statement does not affect any potential liability under the Property Misdescriptions Act 1991. Particulars issued March 2019.

© 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, London, WIG 0AY

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