"This is the first of its kind, where there's been a portfolio of 5 regional assets of similar profile and income."
When Australia’s most prominent car manufacturing brands closed down their local plants in the middle of the 2010s, there was fear that the new vehicle industry had plateaued in this country. Its economic footprint was diminishing, and the annual growth of the sector was set to stagnate as local production ceased.
Fast forward to 2022, and some of those fears seem to have been misplaced. By volume, Australia has witnessed a growth in new vehicle sales of approximately 38% since 2000. Last year alone, the growth figure sat at an impressive 14.5%.
Even with global supply chain issues, consumer demand is maintaining the industry’s strength and keeping workers employed. The sector is influential enough that it makes up 1% of Australia’s nominal GDP, whilst employing over 270,000 people across the country.
The economic impact of the new vehicle sector
The success of the new vehicle industry is only further articulated when we focus on regional locales specifically. With margins remaining relatively uniform irrespective of dealership location, regional dealerships have been enjoying a greater margin on sales turnovers, by virtue of reduced overhead. With the latest Regional Movers Index (RMI) showing quarterly migration from capital cities to regional areas is 15% higher than in the two years pre-COVID, it seems clear that this growth in the sector’s regional enterprises is poised to continue.
Next Commercial's Anthony Bray, David McClatchey, and Ryan Cross, in conjunction with Blowes Real Estate's Gary Blowes, are now offering a portfolio of quality retail assets which have major exposure to this compelling sector. Being showcased are five properties in three regional cities, all leased to Autopact; one of Australia’s largest private motor vehicle retailer groups. With a total net income of approximately $4.587 million, this high-performance investment portfolio offers substantial upside for interested parties.
Included in this set of properties are Clancy Motor Group and Bathurst Motor Group, both located in Bathurst, Orange Motor Group in Orange, and Clancy Automative and Western Plains Automative, both situated in Dubbo. Between the three of them, these municipalities are home to just over an estimated 143,000 people, giving these dealerships expansive catchments.
Clancy Motor Group Kelso - 202 Sydney Road, Kelso NSW
“Our whole goal is to take the five assets to market in one line,” stated Next Commercial’s Anthony Bray. “This is the first of its kind, where there’s been a portfolio of 5 regional assets of similar profile and income.”
Wary investors might initially presume that the portfolio is anchored by one or two major landholdings that raise the profile of the entire selection. But as Bray alluded to in his commentary on the listings, there isn’t a weak property amongst the bunch. Ranging from 11,800-to-19,054 sqm, these are large sites, capable of accomodating a significant amount of vehicles.
With a Weighted Average Lease Expiry (WALE) of 7 years, buyers can be assured that their investment won’t be sitting idle for the better part of the next decade. Notably, the Clancy Motor Group dealership in Kelso has options extending until 2041, whilst the Bathurst Motor Group dealership has options to 2044. Additionally, each property has guaranteed annual increases; either 3% or CPI, whichever is greater.
Orange Motor Group - 8 & 10, 14 Gateway Crescent, Orange NSW
“They are located in that central tablelands district... and are key to that growth corridor which has had an enormous uplift in GDP since COVID."
The area's growth is in part attributable to the cities of Bathurst and Dubbo being integral to the state government’s “Central West and Orana Regional Plan 2036”. The plan has ambitions of transforming this region into one of NSW’s most diverse economies. With population growth forecasts indicating that the region will be home to more than 300,000 people by 2036, the dealerships that make up this portfolio have the potential to increase their already respectable margins over the next ten years and beyond.
Next Commercial and Blowes Real Estate are anticipating that this range of properties will prove exceedingly attractive, particularly to fund managers and high net worth individuals. As such, the agents are encouraging those intrigued to reach out soon, as the Expressions of Interest campaign for the portfolio concludes on Wednesday 29th of June. With such significant gains in the new motor vehicle sector over the past few years, this offering serves as a sound investment opportunity in a reliable industry.
