Pendragon has completed a £10.5 million “sale and leaseback” deal for its Porsche Centre car dealership site in Stockport.
The AM100 car retail group announced in a statement issued via the London Stock Exchange this morning (May 29) that it had entered the agreement with Al Mana Property International Limited, part of the Al Mana Group of Companies, for the site of the new Porsche Centre which had been set to open this month.
Pendragon said that the lease on the 34,500 square foot site off Marsland Street, Stockport, carries a market rent of £665,000 per annum.
As at the date of the company’s annual results for the year ended December 31, 2019, the property carried a gross asset value of £9.8 million
“Under the terms of the transaction, Pendragon has received £10.5 million in cash, while retaining the use of the Property under a 15-year lease,” the statement said.
“The proceeds from the transaction will be used for general corporate purposes.”
The statement added that Pendragon Sabre Limited, the company’s wholly owned subsidiary, has security of tenure as the tenant, with Pendragon acting as the lease guarantor under the terms of the transaction.
It said that the transaction was in-line with the Pendragon’s ambition to focus its resources on generating returns through its motor businesses whilst ensuring the ongoing use of the property.
Earlier this month Pendragon revealed that COVID-19 disruption had wiped out almost £5 million operating profit before the end of March.
The result follows annual financial results which showed the group recorded a loss of £117m in 2019 after the business was left leader-less following the retirement of Trevor Finn and an aborted employment of Mark Herbert as his replacement.
Berman, a veteran US motor retail leader who had headed AutoNation, America's largest dealer group, initially joined Pendragon's board last year as a non-executive director but became its executive chairman in October and was appointed chief executive in February, with a plan to rebuild profits.
Pendragon said that it had currently suspended all corporate identity (CI) upgrades to its network in light of the COVID-19 pandemic, in its statement earlier this month.
That move will have held-up its plans to further expand its Porsche franchise portfolio with the planned development of a new showroom and restaurant on the outskirts of Nottingham.
Plans for that business were given the green light by planning officials back in January.
Pendragon's Stockport Porsche Centre is set to employ a total of 28 people at what is a new retail point for the German premium sports car brand, which is embarking on an expansion of its UK dealer network as it prepares for the arrival of new electric vehicles (EV).
Deliveries of the zero-emission Taycan supercar were set to get underway this month. Prices start at £83,367 for the Taycan 4S.
Prior to the CIVID-19 lockdown work was underway to create another new Porsche Centre, in Norwich, which will be operated by Graham Dacre’s Lind Group.
Back in January, meanwhile, Listers Group opened the Porsche Centre Hull, its first dealership with the German sports car brand.