In today’s market privately owned car dealership investments are hard to come by with several factors driving up new and used car prices. In fact, over the last 12 months new car prices have risen by 7.4 per cent and used car prices by 40 per cent when compared to February 2020. The current supply and logistics constraints, returning expat population, local demand for interstate road holidays, and a reduction in people wanting to engage public transport, has all led to the ‘perfect storm’ for car dealerships.
After 35 years, 47-53 Pacific Highway, home to Waitara Subaru, has come to market. The asset was purchased by well-known automotive business partners David Stevenson and Geoff Boyd-Boland in 1986. A few decades on, after establishing a thriving dealership, the Stevenson and Boyd-Boland families have made the decision to retire from the car industry with global automotive leader Inchcape engaging a long-term lease.
Matthew Meynell, National Director Investment Services at Colliers, and Tom Appleby, Director Investment Services at Colliers, anticipate investor and developer interest will directly correlate with the high demand for cars. In the current Covid-19 landscape everyday consumers are unable to spend money on alternate luxuries like international travel, this has led to the number of local car sales jumping by 28.3 per cent the six months to June, when compared to the same period last year.
“Astute investors covet the automotive sector given the scarce, secure and passive nature of these premium investments. Favourable fundamentals including a 5+5-year lease in place to pandemic-proof tenant, Inchcape, and 3.75 per cent fixed annual rent reviews, will ensure this opportunity is hotly contested. Buyer sentiment is quickly gaining momentum, with ‘Freedom Day’ fast approaching,” Mr. Appleby says.
Waitara has long been the automotive hub for Sydney’s Upper North Shore. Subaru’s neighbours include BMW, Mercedes-Benz, Mazda, Volkswagen, Toyota, AutoOne and Repco. In recent years Australia’s second-largest listed automotive retailer, Autosports Group, purchased the Mercedes-Benz dealership at 120-124 Pacific Highway for $12,500,000, and McCarroll’s Automotive Group secured 42-54 Pacific Highway from Toyota for $21,000,000.
"Given the vast majority of automotive assets are located in prominent locations, they’re now catching the eye of developers willing to land bank and strengthen their development pipeline. The retail freehold occupies a prime 1,435 sqm parcel of land that benefits from favourable underlying planning controls, which essentially future proofs the investment,” Mr. Meynell says.
Over the past 3 months there has been a flurry of activity in Waitara, with Colliers selling 83 Pacific Highway for $3,300,000, 8 Waitara Avenue for $1,600,000 and 12 Waitara Avenue for $1,980,000.