Dealers are being advised to review their property requirements following the impact of COVID-19. .
Lower sales may mean fewer dealerships are required while social distancing and increased online sales will change the use of space.
John Roberts, head of automotive and roadside at Colliers International, said dealers with leasehold dealerships need to be talking with owners.
“The landlord and tenant collaboration is a two-way street. It’s imperative that property owners and occupiers continue to engage with each other to form a partnership moving forward.
“While their dealerships have been closed, occupiers should not have been paying their rates. They could be claiming business rates relief for their properties.
“Furthermore, during lockdown, owners and occupiers ought to have been reviewing their property portfolio with their real estate adviser taking into account proposed sales forecasts to reflect new market conditions.
“If dealers fall into this category, they should be thinking about identifying their property requirements moving forward, for example how they might use underutilised space and buildings and recognising where additional space resource will be required.
Factors to consider
- Include more storage space and customer parking facilities
- Reconfigure their showroom due to social distancing and the potential change in purchasing habits including online sales
- This could incorporate additional handover facilities for click-and-collect purchase options, with safe distancing
- Due to perceived increase of online retailing, there may be a requirement to have further additional compounds to hold stock
- There might even be opportunities to multi-franchise as more online businesses will require bigger compounds. They will also potentially need to look at their options to release value from under utilised space
- There might be the opportunity to increase footfall at their dealership through complimentary uses, such as adding a drive-thru coffee unit
- If finance is an issue, there could also be the option for owner dealers to undertake a sale and leaseback to release cash.