LONDON, UK: Schroder European REIT, the company investing in European growth cities, has exchanged contracts to purchase a freehold car showroom property in Cannes, southern France, for €8.4 million, reflecting a net initial yield of 5.5% and a reversionary yield of 6.4%.
The 4,235 sqm showroom is fully let to FCA Motor Village France, a subsidiary of the global automotive manufacturer Stellantis Corporation. Brands traded from the asset include Fiat, Alfa Romeo, Jeep, Abarth and Lancia. The remaining lease term is c. 3 years off an affordable and sustainable rent subject to annual indexation.
Located in one of France’s fastest growing regions from a GDP and population perspective, the asset serves as the tenants’ primary car showroom within a broader agglomeration spanning over 20 dealerships that cannot be replicated.
The site benefits from excellent accessibility and visibility, with 200 metres of frontage to Avenue du Campon, the main arterial road linking the A8 motorway to Cannes. Neighbouring car dealerships include Lamborghini, Ferrari, Ford and Toyota. The site benefits from a scarcity of land and longer term scope for alternate use.
Commenting on the acquisition, Jeff O’Dwyer, Fund manager for Schroder Capital commented: “This acquisition not only offers attractive day one income but also assists in further diversifying the portfolio while strengthening our exposure to higher growth Continental European regions. The site configuration and neighbouring medium density residential creates longer term scope for alternate use. We continue to be patient in investing the remaining proceeds from the sale of Paris Boulogne Billancourt and expect the availability of investment opportunities to improve.”
The purchase is subject to a waiver of statutory pre-emption rights in the French market and is therefore expected to complete in June 2022.