Under the scheme the dealer and Gilbran will enter into a joint venture agreement, with both taking a 50% stake in the joint venture company.
Gilbran will receive rental income from the site and after an agreed period the net equity in the property will be split equally between Gilbran and the dealer.
Nigel Smith, managing director at Gilbran, believes this will provide dealers with a compelling rationale to use Gilbran’s automotive real estate expertise.
“The scheme allows dealers to secure a sale and leaseback agreement or to develop new retail sites and gain an ownership stake in the premises, without having to make an up-front capital commitment as would be required under traditional arrangements,” says Smith.
“We are looking to create network solutions that will enable dealers and manufacturers to reach their sales goals.”
Smith recognizes that the scheme must remain flexible and states that if an opportunity arises to sell the property and raise money for an alternative project before the lease is up, then Gilbran will work with clients to find the best solution, potentially lowering rental costs.
He says: “We believe the scheme provides dealer groups and individual entrepreneurs with the opportunity to build and expand their dealership portfolios with minimal financial risk to themselves or their businesses.
“By providing a way for the dealer to gain a share in the long term growth of their assets, there is an element of pensions planning in this for smaller dealers.”
Gilbran is currently working with four clients on a shared equity property scheme basis, the first of which is due to be completed in the Midlands this September.