Automotive Holdings Group has announced a partnership with Australasian Property Investments to launch a $66 million unlisted property trust.
The trust involves five car dealer sites located in Perth and Sydney, AHG managing director Bronte Howson said.
The Perth properties include Midway Ford in Midland, Challenger Ford’s new and used dealerships in Rockingham, and the Rockingham Hyundai and Suzuki dealership.
Under the agreement, API has a 90 day option to finalise the AHG Property Syndicate No 1 and a further 45 days to complete the purchase of the five properties for $47 million.
The syndicate would then fund a further $19 million to complete the car dealership development at Castle Hill in Sydney.
Also, AHG will lease back each site on a 15-year lease term with two 10-year options.
Mr Howson said the agreement delivered on the company’s property strategy, and proceeds of syndication would provide additional funding for its growth plans.
““Property development is not AHG’s core focus however in recent years we have purchased a number of landmark dealership development sites in Perth and Sydney to support continuing growth in our automotive division,” Mr Howson said.
“Completion of the syndication would enable us to release the value of these property assets developed in Perth, as well as land purchased at Castle Hill in Sydney and future development costs of four dealerships on that site.
“The $66 million released from this transaction would assist in funding our growth plans, which include continuing to build scale and brand diversity in AHG’s Automotive business in Victoria.”