RO Group has acquired the freehold of the Reading Honda dealership in Reading for £6.2m from USS, in a deal reflecting a net initial yield of 9.93%.
The 16,400 sq ft property, which is located just off the A33, is let to Honda Motor Europe for 25 years expiring in 2033, with a break clause in October 2028.
With its low site coverage of 18% across 1.76 acres, the property also holds significant potential for alternative use redevelopment.
Nick Cashmore, investment director at RO Real Estate, said: “It is exciting to start the new year by completing this acquisition, which is particularly significant as we seek to grow the group’s roadside portfolio in 2024. This well located asset offers us a particularly attractive running yield and future development optionality given the very low site cover. We are actively seeking new opportunities for prominent roadside sites for development across the Midlands and South”
Bill Bexson, head of the automotive team at Savills, which advised RO Group on the acquisition, added: “The Honda showroom provided RO Group with an excellent opportunity to acquire a prime well located facility. At present, there is a severe supply/demand imbalance in the wider occupational market, which we anticipate will over time offer multiple asset enhancement opportunities.”
USS was advised by Knight Frank.
