Dealership Properties Remain Subdued
28/07/2009
Demand for dealership property across the UK was "subdued" in the first half of 2009, according to property consultant Rapleys.
It said the contraction in the number of dealer sales points will continue and the trend towards multifranchising is gathering pace as carmakers and dealers squeeze costs, particularly for those brands operating at lower cost end of the market.
As a result, property prices and rents are unlikely to recover in the short term, it said.
"Until funding becomes more readily available dealers will prefer to pick up businesses on competitive and flexible leases rather than locking up capital in bricks and mortar."
Rapleys said it saw no pick up in the market and did not forecast one until 2010. Thereafter, well capitalised firms will be able to pick up smaller dealers on "much more favourable terms than hithero," it said.
"Rents and prices for larger properties in core markets are likely to recover more quickly," it said. Smaller properties in outlying areas will remain under pressure.
Rapleys said that although demand from dealers was low, vacant car showrooms were considered suitable targets for convenience retailers