Champion jockey and property entrepreneur David Maxwell is preparing a £250m portfolio of car showrooms for sale.
The portfolio, owned by Maxwell’s DPK and Pendragon, comprises about 50 showrooms across the country, let to Pendragon for between seven and 15 years. The sale price would represent a yield of just over 6%.
Strong interest is expected from the institutional sector, which has been increasingly active in the market over the past year.
The properties are understood to be the first tranche of a number of Pendragon-let properties to be readied for market in the coming months, with a number of agents approached about handling the sale.
According to the Automotive Property Consultancy, rents in the sub-sector are currently rising at about 3% per quarter, as car sales increase in line with the economic recovery.
Agents now expect prime yields for the sector to plateau at about 4.75%.
One said: “Covenants have improved hugely in the past two years, and lease lengths tend to be getting longer. The product is increasingly rare and sites for new stock to be built on are also increasingly rare.”
Maxwell has been heavily involved in the ownership of Pendragon assets, buying out AAIM – which owned a minority stake in an 84-showroom portfolio produced from a sale-and-leaseback deal – in 2010.
That portfolio was included in RBS’s £1.4bn Isobel loan portfolio of distressed debt. When administrators were appointed to the special-purpose vehicle that held the portfolio, it
was sold back to DPK and Pendragon for £170m.
Legal & General Property bought a nine-strong Pendragon portfolio from Hermes Real Estate for £40m in August 2013.
