In our final ‘5 Minutes With’ of 2025, Daniel Cook, head of automotive at property consultancy Rapleys, discussed where he thinks the following wave of retail formats will come from, and why.
What off-pitch formats are you seeing gain traction?
Two clear trends. First, we’re seeing smaller, leaner dealership footprints due to increasing presence of electrical vehicles (EV) and a smaller product range. The aftersales requirement is predicted to say no over time resulting from fewer moving parts, less frequent servicing for EVs – so the times of the usual 8-10 bay workshop because the default are beginning to be questioned. That has a knock-on effect on the built accommodation. We’re seeing formats come through where the required constructing is smaller, which obviously helps the economics.
Second, we’re seeing a move towards aftersales-only facilities that appear and feel like full dealerships. A superb example is Mercedes-Benz in Southend which is now aftersales-only having relocated from a full, all-singing, all-dancing dealership. It’s now a new-build industrial-style site that appears very “Mercedes” from the surface but is solely an aftersales facility, serving a big territory. If a customer wants to have a look at new-car product, they’d should go to Lakeside or Chelmsford. I feel we’ll see more of that: sales in fewer, larger, more strategic locations; aftersales staying local.
On EV charging hubs, I’m not seeing a mad rush from dealer groups to co-locate. Some manufacturers have done their very own thing and quite a lot of dealers have been forced to take a position heavily in charging infrastructure on-site – including high-capacity chargers where, frankly, there hasn’t been the product to justify them yet. You’ve got 150kW-plus chargers going into sites and a few vehicles only able to 22kW. That’s been a frustration for some. Roadside EV charging requirements have also cooled a bit within the last 12-18 months. The few offers we’ve seen for roadside sites recently are at 20-30% lower rents per charger than they were, which suggests the market got a bit too hot too quickly. There’s more supply, people charge at home, and so the returns have normalised.
AM: How are multi-brand and repurposed sites changing the property temporary?
Multi-brand is an enormous one and I feel we’ll see more of it. For the primary time we’ve seen applications for Volkswagen Group’s brands under one roof – and there was an announcement only last week about Agnew duel branding VW / Skoda in Belfast and Newtownabbey. With Stellantis, it’s much more obvious. Peugeot, Citroën, Vauxhall, DS – we’re already seeing them grouped together. There’s a long-standing example in Burnt Oak in north London where 4 brands sit in a comparatively modest constructing. That type of format helps with cost because construct costs are astronomically high in the intervening time.
The challenge is that if you happen to’ve got 4 showrooms, you traditionally need 4 times the variety of workbays. Finding a 50,000 sq ft facility on three or 4 acres in the correct location is difficult and expensive so you find yourself on the lookout for a compromise – a smaller, smarter constructing with an enormous used automotive display and a more flexible internal layout. We acquired various sites for Pendragon’s Automotive Store concept – now under Lithia’s ownership – where the intention was to construct freehold sites designed for used automotive retail but with the power to bring a franchise in later. They were typically 10,000-15,000 sq ft buildings on two to 3 acres: ideal for used, but additionally very able to housing multiple brands since you don’t necessarily need huge showroom space, you would like display and workshops.
On repurposing, most of what we see is existing dealerships being re-used quite than non-automotive stock being converted, except in very prime locations. There’s an office constructing in Cambridge that was occupied by Nokia, for instance, which the local Kia dealer has just secured permission to redevelop – that’s quite unusual, and so they were on the lookout for a protracted time. Outside those sorts of locations, it’s more typically dealer-to-dealer repurposing.
AM: Are retail parks now the default for brand new formats, or is there still a job for city-centre space?
Dealers have been moving away from city centres for a very long time, and I don’t see that trend reversing. Retail parks are the plain repurposing opportunity – good access, parking, visibility – but they’re not without their very own pressures. In my home city of Cambridge, for instance, we’re susceptible to losing a couple of third of our retail warehouse space with one retail park closing and being redeveloped. That’s on top of the present challenge of finding suitable sites. In consequence, latest dealerships have been pushed further out. Ten years ago, BMW went to Cambourne, Audi are at Babraham – each well outside the town. Tesla have built at Bar Hill, again outside the urban core, and Marshall have been winding down their multi franchise site on Newmarket Road. It’s illustration of the challenges and the way far you now should go to search out the correct combination of land, planning and access. So yes, retail parks and edge-of-town sites are very necessary, but they’re not a silver bullet – they’re limited and increasingly contested.
AM: What big structural shifts in ownership and investment are shaping the property market behind all this?
From Rapleys’ standpoint, one among the largest themes – and I see it as a chance – is the quantity of foreign investment into UK dealer groups. It’s not entirely latest, but it surely has accelerated. You’ve seen Lithia buying Pendragon and Jardine; Lookers being bought by Alpha Auto Group; and I’d expect more consolidation to return. There’s broad agreement that we still have too many dealerships within the UK, and that’s driving a wave of M&A and network restructuring. From a property perspective, meaning more sites coming to market, more repurposing and morbe probabilities for used automotive operators or lower-tier franchises to step into premises that were once prestige flagships.
AM: How is the off-site store or shopping-centre dealership concept faring?
In the event you return about 10 years, there was an actual flurry of activity. Numerous latest brands took units in shopping centres to point out off their product. Once those brands had a correct network up and running, though, quite a lot of them realised it was a value they didn’t need. Five or so years ago you then had the used automotive boom. Latest automotive volumes fell off a cliff due to microprocessor shortages coming out of China and the broader impact of Covid which definitely saw a decline. In a crisis, shopping centre stores were simply viewed as a non-essential marketing cost.
What we’re probably seeing now could be a slight uptick again but driven way more by the brand new Chinese brands coming into the UK – BYD, Omoda, Jaecoo, Chery, Changan and so forth. If no person knows who you’re, having 30,000-40,000 people walk past your brand each day is kind of a compelling technique to introduce yourself. But my advice for dealers and OEMs enthusiastic about off-site formats can be: be very clear whether you’re solving a brand awareness problem or a distribution problem; don’t tackle long, inflexible leases simply because that’s what non-automotive retailers used to do and keep in mind that while manufacturers may love the thought of a store, the economics should work for the dealer who’s actually signing the lease and selling the cars.
If those three things are aligned, there will likely be some superb opportunities on the market – each on and off the normal dealership pitch.
This Article First Appeared At www.am-online.com
