LGP acquires Pendragon portfolio
Legal & General Property (LGP), on behalf of its UK Property Unit Trust (PUT), has purchased the Pendragon portfolio of nine car showroom investments from Hermes Real Estate Investment Management Limited (HREIML) for a total consideration of GBP40m, representing a net initial yield of 6.33 per cent.
The portfolio is let to Pendragon Plc and benefits from an average unexpired lease term of over 15.5 years.
Pendragon Plc is Britain’s biggest franchised motor dealer group, based on turnover and volume of dealerships. Its two main brands are Stratstone, which focuses on luxury cars and motorcycles, including Ferrari, Honda, Land Rover, Maserati, Mercedes-Benz and MINI, and Evans Halshaw, which is the largest volume car retailer in the UK, and includes brands such as Vauxhall, Ford, Nissan and Renault. Situated across the UK, the portfolio includes locations such as Bedford, Glasgow, Edinburgh and Leeds.
Matt Jarvis, fund manager of the PUT at Legal & General Property, says: “With assets situated in key geographic territories and benefiting from good levels of prominence, the purchase of this portfolio is closely in line with the fund’s strategy to acquire well located, high quality assets which offer secure income returns over the medium term. The showrooms are dedicated to serving strong and profitable manufacturer brands, such as Land Rover and Mercedes Benz, and therefore, in our opinion, offer enduring appeal, as well as offering the Fund diversification into a new sub-sector.”
Launched in 2006, the PUT has outperformed the Lipper Property IMA Sector peers over one, three, and five years. Benchmarked against the Lipper Property IMA and IPD Balanced Monthly Index Funds, its investment objective is to achieve income and capital growth through diversified investment in UK commercial property, with a focus on property selection and active management within a research-driven risk/return framework for portfolio construction.
GVA and FSP advised LGP, and Tudor Toone and Automotive Property Consulting represented HREIML.