AP Eagers to sell three inner city sites as it makes expansion plans and moves to relocate to Brisbane Airport’s Auto Mall

One of Australia’s largest car retailers is shaking up the industry with merger plans and a restructure including the sale of three key Brisbane sites.

AP Eagers CEO Martin Ward.

ONE of Australia’s largest automotive companies AP Eagers will offload three Brisbane inner city properties while it’s in the midst of the takeover of a Perth-based rival.

Brisbane investment manager Marquette Properties will pay $55.5 million for the Newstead properties in a seven-year leaseback arrangement.

The properties at 11 Evelyn St and 79 Breakfast Creek Rd are currently a Subaru dealership while 7 Creswell St is occupied by Austral Motors Prestige, with the total land component totalling about 1.5ha.

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Marquette Properties managing director Toby Lewis said the company was happy to collect rent from AP Eagers for the next seven years.

“Beyond that we will look to either re-lease or sell to an automotive owner occupier,” he said.

“But because it’s such a huge landholding with seven corners across three properties and with 700m of street frontage there are a lot of different options in terms of office, aged care and other potential developments.”

The deal was struck by JLL’s Seb Turnbull, Elliott O’Shea and Luke Billiau and it is expected to settle on May 22.

AP Eagers chief executive Martin Ward said the sale was a key step in the company’s “Next100” future growth strategy of which major component was the move to the Brisbane Auto Mall at the airport.

“AP Eagers has secured 64,124sq m within the state-of-the-art automotive retailing precinct, strategically located at the Brisbane Airport. We will relocate a number of dealerships to the Auto Mall to provide a truly unique and world class customer experience.”

AP Eagers is currently in the midst of a takeover of Automotive Holdings Group to create Australia’s largest car retailing group amid growing signs of consolidation in the auto market.

The merger would create a company with 229 new car dealerships in Australia and 13 sites in New Zealand.

Mr Ward said the sale of the three properties will generate a profit before tax of $24 million. The profit will be recognised over the seven-year lease term with an annual profit contribution of $3.4 million.

“The sale of the Newstead properties will provide a significant profit and cash contribution with the proceeds intended to be used to repay corporate debt and to further strengthen the company’s balance sheet as it pursues future growth initiatives,” Mr Martin said.