Gordon Lamb Holdings has sold a three-acre multi-franchised site in the centre of Sheffield to a property developer that has built a seven-storey block of flats on adjoining land.

The price paid by Rapid Elevation has not been disclosed, but Stephen Lamb, chief executive of the dealer group, says: “The developer has paid a significant sum, which will allow us to reduce our fixed operating costs at a time when industry margins are tight.”

Last year, Gordon Lamb sold a Nottingham dealership to Sandicliffe, but the group owns commercial and private property in Sheffield and Chesterfield that generates “a healthy return”.

Rapid Elevation has started redeveloping one acre. Until 2008, Gordon Lamb is leasing back the rest of the site where it operates Saab and Mitsubishi franchises.

The group, No 74 in June’s AM100 on £134m, stopped selling Lotus cars from the Sheffield site in June because the volume of sales did not justify the investment, though it continues to be an authorized repairer.

Gordon Lamb is also an authorized repairer for MG Rover at the site. This is not likely to continue when the site is vacated and, commenting on plans by Nanjing Automobile to restart MG production, Stephen Lamb says: “I’ll believe it when it happens.”

In two years time, Gordon Lamb will move Mitsubishi and Saab to another site in south-west Sheffield. The group acquired the freehold in 2004, and the site is rented by Gilder Audi.

It is looking to fill open points with existing partners, while expanding its property portfolio.