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Recent Showroom Deals
LONDON BRISTOL EDINBURGH HUNTINGDON MANCHESTER
Motor Dealership Quarterly Update
The tail off in showroom demand we experienced over the last
quarter of 2010 has continued into the first quarter of 2011.
Corporate activity has been equally subdued. In 2010 the Marshall
Motor Group and Vertu grabbed the headlines with a string of
acquisitions, although since the turn of the year no major deals have
been announced.
The big issue on the horizon for dealers is the renewal of Block
Exemption Regulations for new vehicle sales contracts, which are
due to come into force in May 2013. Those manufacturers which are
introducing new dealer contracts are required to give two years
notice, so it is likely this will stimulate activity as the year rolls on.
Equally, there are several well positioned dealer groups with strong
manufacturer relationships and healthy balance sheets who are
ready to pounce for the right opportunities. Both premium brand
franchises and the larger “volume” brand franchises remain in
strong demand, particularly in the larger towns and cities which offer
significant trading opportunities.
From a property perspective the showroom market has been
predominantly driven by established players or by sponsored dealers
with manufacturer support. There are few new entrants into the
market and further consolidation on what remains a fragmented
market is most likely to occur. Recent data collected by Grant
Thornton reveals that the Top 10 dealer groups increased their
collective turnover by 4% in 2010, compared to the same period the
previous year. (This, despite the largest group, Pendragon, showing
a downfall of over 38% in turnover since 2008). It seems likely that
this trend will continue with the larger dealers securing a greater
market share at the expense of smaller independent operators.
Against this backdrop showroom property prices and rents remain
under pressure in what is a thin market. There are few signs of
upward movement in prices but, equally, we have not seen
significant further falls. On the contrary, we see an encouraging
resurgence and interest in showroom property from alternative
roadside occupiers predominantly in the retail and fast fit sectors.
Virtually all of the major supermarket groups have active acquisition
programmes for store concepts embracing convenient outlets
upwards to major foodstores. whilst companies such as Majestic
Wine, Topps Tiles, National Tyres, Halfords are all actively seeking
prominent well located showroom and roadside outlets across the
country for which ex dealership stock is often well suited.
2011 PROPERTY NEWS
NORTHAMPTON
Let to Progress Skoda Limited
Motor Trade & Roadside
EVESHAM
Acquired for Majestic Wine Warehouses Ltd
PRESTON
Investment sold to Lightstone Properties Plc
WIDNES
Sold to Trevalyn Estates Ltd
The message is that dealers wanting to exit from under performing
sites should therefore look further afield to find buyers.
In terms of inward property investment the cost of entry for dealers
representing premium brands remains as high as ever.
Manufacturers chose not to push dealer standards in the teeth of the
recession, although this appears no longer to be the case in the run
up to 2013. In the main, property facility requirements for premium
brands are moving towards ever larger bespoke facilities.
At the other end of the spectrum multi franchising on a single site for
“value” brands is becoming more accepted. Manufacturers
representing these brands (and those brands with limited UK market
share) are seeking dealer partners who can provide them with a cost
effective means of representation in key markets, which would
otherwise not occur. Equally, dealers looking to maximise return
from their property assets can no longer afford to represent these
brands in standalone showrooms so the benefit of multi franchising
works both ways for manufacturer and dealer alike. As a
consequence, properties with the flexibility to represent a number of
brands under one roof and yet share back office, parts, workshop
and administrative space should become more attractive for
continued automotive use beyond 2013.
For further information and advice on emerging trends and how they might impact upon your showroom
property, please contact our specialist Motor Trade & Roadside Team on 0870 777 6292 or directly, as
below:
0870 777 6292 www.rapleys.co.uk
The comments in this newsletter are for information purposes only. Professional advice should be sought prior to taking any action
and Rapleys LLP will not accept responsibility for decisions taken solely on the basis of information contained in this newsletter.
LONDON BRISTOL EDINBURGH HUNTINGDON MANCHESTER
Mike Pearce
Alisdair James
Paul Mather
Mark Frostick
07836 229712
07980 871070
07810 885498
07785 522958
Recent Showroom Deals
WINDSOR
Let to Uniquemade Ltd
NORTHWICH
Sold to P&L Property Management
(Trading as Onsite Services Ltd)
