Big Motoring World targeting £14m in fresh funds with sale and leaseback deal

Used car supermarket Big Motoring World is looking to free up capital by entering into a sale and leaseback agreement for its key facility in Peterborough.

The property, south of Peterborough’s city centre, is a critical hub for Big Motoring World's operations. Situated near Fletton Parkway, with dual carriageway access to junction 17 of the A1(M), the 168,737 sq ft facility which sits on a 9.8-acre site serves as a car preparation centre before distribution across the company’s sales locations.

Having undergone a £1.75 million refurbishment in 2020, the property boasts state-of-the-art infrastructure, including a four-bay industrial warehouse, two-storey office accommodation, 112 workshop ramps, 10 MOT bays, a parts department, and bodywork repair facilities.

Additionally, a dedicated appraisal centre was constructed in 2020 to streamline vehicle inspections on arrival.

The property, marketed by HSM Chartered Surveyors, is being offered for sale to be then leased back to Bapchild Motoring World (Kent) Limited, trading as Big Motoring World, on a new 20-year basis.

The initial rent is set at £1m per annum (£5.90 per sq ft), with five-year rent reviews, capped at 5% per annum.

The sale is seeking offers in excess of £14.28m, reflecting a net initial yield of 6.5% and a capital value of £85 per sq ft.

Big Motoring World has experienced rapid growth over the past 18 months, marked by a series of strategic acquisitions which have significantly contributed to the company’s expansion. with turnover projected to reach approximately £1 billion.

For the year ending December 31, 2023, Big Motoring World reported a turnover of £697.44m, up from £529.68m in 2022.

However, like many in the motor retail sector, profitability has been impacted by market adjustments, with pre-tax profits at £2.247m compared to £10.953m in the previous year. Shareholders’ funds stood at £32.258m at the end of 2023.

‘Falling profitability in the motor retail sector was a common theme for most dealer groups during 2023, primarily resulting from a constrained supply and pricing correction in the used car market following unprecedented price increases during the Covid pandemic," said HSM in the sales brochure.

Big Motoring World now operates ten used car supermarkets across England, including sites in West Malling, Blue Bell Hill, Enfield, Peterborough, Wimbledon, Leeds, Cannock, Sheffield, Norwich, and Camberley.

Recent acquisitions include three former Sytner Group CarShop locations in Sheffield, Norwich, and Camberley, as well as the two former Available Car supermarkets in the Midlands. Big Motoring World said it was targeting in excess of £1 billion turnover with the acquisition of the three Carshop sites last year.