Euro Car Parts founder and chairman Sukhpal Singh Ahluwalia is building a 1m sq ft shed, opening his 200th UK outlet – and taking his formidable logistics skills to India. He talks to David Thame
If you judge a man by the size of his warehouse, Sukhpal Singh Ahluwalia is a giant. The founder and chairman of Euro Car Parts – and of investor/developer Dominvs Group – is one of the big names in industrial property.
Today he presides over the construction of a 778,000 sq ft mega-shed in Birch Coppice, Staffordshire, set to grow to 1m sq ft with a mezzanine. The shed – built by IM Properties and funded by M&G Real Estate thanks to an £81m deal – rises as the Euro Car Parts chain opens its 200th outlet.
Ahluwalia is at the top of his game, having driven the Euro Car Parts business from a £5,000 start-up to a £280m sale. Meanwhile, ECP sister company Dominvs is buying into the red-hot shed scene as it deploys £300m of capital. But now, at the age of 56, Ahluwalia is planning to take his logistics skills to New Delhi. So why is he about to call it a day on UK property?
“The process of shifting to India has begun,” says the formerly Wembley-based entrepreneur. “It will take years, but it has begun. I have settled the kids with Dominvs, and slowly things are changing for me.”
Ahluwalia is already chairman of the Indian division of LKQ, the Chicago-based firm that bought Euro Car Parts in 2012. “We are looking to expand and develop the car parts and repair business in India,” he says.
“I think now is the time to make the move. I am working a few days a week with the Dominvs business at Baker Street, and I am heavily involved in building up a residential and commercial property portfolio in India. I think my long-term future is in India. That’s where I want to be.”
Although it is still early days, Ahluwalia explains why his UK logistics and development skills will work in the emerging markets of southern Asia.
“We are looking at logistics in India, because the Indian economy is growing fast, whereas the other BRIC economies – China, Russia and Brazil – have all begun to slow. They don’t have anything like European logistics infrastructure in India, and distances are so great that a huge proportion of fresh products waste before they reach delivery. They are 50 years behind, and we need to look carefully at how to exploit the sector. So we are starting almost from scratch.”
He is also working on the feasibility of some substantial – but, as yet, hush-hush – residential developments in the subcontinent.
The move to India will be the latest in a series of journeys that have taken Ahluwalia from Africa, via Willesden
to Hampstead.
He arrived in the UK in 1972, among the thousands of Asian settlers moved to Uganda by the British colonial regime and then expelled by Idi Amin. By the age of 18, he had borrowed £5,000 to buy a struggling Willesden car parts shop – the basis of the Euro Car Parts empire.
Today he lives in Hampstead, and counts property movers and shakers such as entrepreneur David Pearl and housebuilder Stephen Conway among
his chums.
“Property people are hard-nosed – they get what they want,” he says. “In the property business, it isn’t about being empathetic with the customer’s needs. It is just supply and demand – they have a shed available for you, or they don’t.”
Yet Ahluwalia has a foot in both camps. As chairman of ECP, he is one of the UK’s largest occupiers of property, and as founder of Dominvs, he is one of its big property investors. “I wear both hats, so I know what I can get away with,” he says.
At Euro Car Parts, he is getting away with a lot of growth. The 200th outlet – in London – is by no means the last. Perhaps 25-30 more will arrive in 2016 and similar growth is expected for the next four years.
“I think there are still opportunities for another 100 or so outlets over three or four years,” Ahluwalia says. “We have captured all the main locations, so this will be in outlying locations in the Midlands, Scotland, the South East.”
This will also mean a larger logistics network to support the stores. “We are already adding a mezzanine to the Birch Coppice depot, which will take it to 1m sq ft, and we are keeping the 250,000 sq ft unit we have next door,” he says. “The approach to growth will be spoke and hub – so we will look to expand our existing 16 regional distribution hubs up to 25.”
Each 50,000 sq ft regional hub is, in turn, served by the Birch Coppice national distribution centre.
“It will take years to move myself to India,” says Ahluwalia. “Slowly, slowly.”
Meanwhile, his influence will continue to be felt through Dominvs Group, which has a growing interest in industrial property (see panel, right).
“My heart and passion resides in India, my history connects me with Africa, my 35 years of business accomplishments throughout Europe, Asia, Africa and the Americas places me in an incredibly privileged position to develop further my great love with, and established connections within, India,” he says.
“Although I am immensely proud of all my achievements to date, in my business and personal life, it is the next chapter of my journey that excites me most.”
Parts bigger than the whole
The new 778,000 sq ft Euro Car Parts warehouse at Birch Coppice, Staffordshire, costs almost as much to fit out as it did to fund.
The fit-out – which ECP chairman Sukhpal Singh Ahluwalia is paying around £70m for – contrasts with the £81m forward-funding deal.
M&G Real Estate paid £81m for the warehouse in a deal with IM Properties, a net initial yield of 5.1%.
“You can’t take chances with a building of this scale,” says Ahluwalia. “We had not anticipated such aggressive growth at Euro Car Parts, so a new shed became a priority. Luckily, we were occupiers at Tamworth and when IM Properties was aware we wanted to expand, they spoke to us. It was very fortunate because the Golden Triangle is a challenging location to find the right property – and it is getting more expensive.
“We have struck a good deal and everyone’s happy. We will claw some of the costs back. We have got double costs to start with because we have to run other older warehouses in parallel, and it will take a year or two to get the new racking system in place and learn how to use it.”
The prelet, agreed in 2014, sees the warehouse constructed on a 35-acre site. ECP has agreed a 20-year lease.
Savills advised M&G Real Estate; CBRE acted for IM Properties.
200 and counting
Acton, NW10, is the location for the 200th Euro Car Parts outlet. The 7,478 sq ft, three-storey unit – combining warehouse space with a trade counter – was taken on a 10-year lease from CBRE Global Investors.
“This is one of our new-look retail stores providing a full click-and-collect service, in a purpose-built branch in a prime location,” says chairman Sukhpal Singh Ahluwalia.
BT Consultants advised Euro Car Parts on the letting.
Euro Car Parts is one of the UK’s leading distributors of car parts for all makes of cars and light commercial vehicles. Established by Ahluwalia in 1978, ECP is now owned by LKQ Corporation.
The company makes around 82,000 deliveries to UK workshops every working day.
ECP specialises in all major car parts – brake pads, blades, batteries, bulbs and all car maintenance essentials, such as engine oil and fluids. All are available to order online. ECP also supplies a large range of interior accessories, such as satnavs, stereos and speakers.
Dominvs
Preet Ahluwalia looks after leisure property at Dominvs Group, the Baker Street-based property business founded by Euro Car Parts chairman Sukhpal Singh Ahluwalia. Rani Ahluwalia is in charge of interior design and Husnell Ahluwalia handles the £150m central London residential property management.
The group’s growing industrial portfolio includes a recently acquired 492,000 sq ft slice of Blackburn’s Walker Industrial Park. The 134-acre park is one of the North’s most popular distribution sites. Dominvs Group’s commercial property investment arm, Dominvs Commercial, paid a price rumoured to be around £14m.
Earlier this year, Vision Support Services signed for a 61,387 sq ft warehouse at the site. The 10-year lease with landlord Dominvs Group means the company’s head office and warehouse are now on the same site.
