SCHRODER European Real Estate Investment Trust, which invests in European growth cities, has exchanged contracts to purchase a freehold car showroom property in Cannes, southern France, for €8.4 million (R136.9M), reflecting a net initial yield of 5.5 percent.
The 4 235 square metre showroom is 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 was three years, off an affordable and sustainable rent subject to annual indexation, a statement from Schroder said yesterday.
Located in one of France’s fastest growing regions from a gross domestic and product as well as population perspective, the asset serves as the tenants’ primary car showroom within a broader agglomeration of over 20 dealerships that cannot be replicated.
The site fronts on 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.
Schroder Capital fund manager Jeff O’Dwyer said the acquisition offered attractive day one income, and would assist in further diversifying the portfolio, while strengthening the company’s exposure to higher growth Continental European regions.
The site configuration and neighbouring medium density residential also created 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,” he said.