This article is from the Australian Property Journal archive
A PORTFOLIO of four car dealerships totalling 31,000 sqm east of Melbourne leased to the Johannesburg-listed automotive group Motus have hit the market.
The dealerships are situated in Pakenham on Melbourne’s eastern fringe, and Traralgon and Leongatha, and are leased on 10-year terms with the earliest expiring in late 2027.
Net operating income totals almost $2.5 million.
Motus was founded in South Africa in 1948 and is now a multinational group employing 17,000 people worldwide. Its Australian dealerships represent manufacturers including Jaguar, Mercedes-Benz, Land Rover, Mazda, Volkswagen, MG, Suzuki and Mitsubishi. The group has indicated it is looking at expanding its Australian presence in Australia.
The sale is being conducted by JLL’s Stuart Taylor and Tom Noonan.
The two sites in Traralgon, in the Latrobe Valley, account for the bulk of the portfolio, at 20,000 sqm and 9,386 sqm respectively and a combined net operating income of over $2 million.
The former, at 5567 Princes Highway, incorporates brands Isuzu Ute, Mazda, Mitsubishi, GMSV, Subaru and Volkswagen, as well as a café and car wash, while 5533-5535 Princes Highway is home to Mercedes Benz, Land Rover, Peugeot, MG and Suzuki.
The Pakenham site covers 1,877 sqm is used exclusively for Isuzu commercial vehicles, while the Leongatha site, of 2,060 sqm, combines Subaru and Isuzu Ute. Combined net operating incomes are around $397,000 per annum.
Noonan expects the properties to generate interest from a range of private and institutional investors.
“The portfolio offers a rare opportunity to acquire multiple assets in this sought-after sector, underpinned by one of the strongest tenant covenants in the automotive sales industry on a global level.”
Dealerships sold in Melbourne recently have often been development or landbank plays. Orchard Piper has just bought the Mercedes-Benz dealership in ritzy Toorak for $67 million for a $400 million mixed-use precinct, while a mainland Chinese investor paid $32.6 million for the Chadstone Ford and Hyundai dealership on a yield of 3.32%.
Taylor said, “Since the onset of the pandemic in Australia we have seen the car sales industry skyrocket, resulting in high volumes of sales and record profits. The high demand for cars has directly translated to increased investor appetite for automotive investments due to the strength of the tenant covenants, as well as these assets providing large landholdings and long leases.”
The City of Latrobe, including Traralgon, is one of Victoria’s fastest-growing centres, with its population forecast to rise by more than 34% to 2041, while the new Pakenham East residential development set to increase the local population from 1,500 to 23,000 by 2041.
Expressions of interest, individually or in one line, close on 14th July.
