02/07/2012 - 14:31

AHG covers $6m shortfall in syndicate sale

02/07/2012 - 14:31

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AHG covers $6m shortfall in syndicate sale

Perth-based Automotive Holdings Group has sold five dealership sites to officially create its property syndicate; but will invest $6 million itself to finalise the sale.

AHG and Australian Property Investments announced plans in February to form the $66 million syndicate AHG Property Syndicate No 1.

Final establishment of the syndicate depended on API raising funds to buy five AHG dealership sites for $47 million.

The properties are the new and used Challenger Ford dealerships in Rockingham, Rockingham Hyundai and Suzuki, Midway Ford in Midland, and a dealership in Castle Hill in New South Wales.

AHG has announced the sale has been completed, but it is to invest a final $6 million which API failed to raise.

AHG managing director Bronte Howson said API had “achieved considerable success” in attracting “sophisticated and wholesale investors”, but a further $6 million was required to close the offer.

“Property development is not AHG’s core focus, and the sale and leaseback allows us to release the value of the properties and future development costs to assist in funding future growth,” Mr Howson said.

“In that context investing $6 million in the trust to complete the transaction was an easy decision.”

 AHG says the syndicate is the first of its size to focus exclusively on Australian automotive properties.

Of the total $47 million transacted, $19 million will be used to develop future car dealerships, including two in New South Wales.

AHG will lease back the sold sites on 15 year lease terms with two ten-year options.

 

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