The largest single asset investment transaction in the motorway service area sector has just been completed, according to real estate specialist Knight Frank.
Its specialist property investment team and newly formed automotive team have advised a leading fund manager on the acquisition of Woolley Edge Services for over £35m.
The facility occupies a location on the M1 near Wakefield, West Yorkshire, and is run by Moto, the UKs largest service area operator. The acquisition follows a spate of activity in the sector in recent years, with more than £250m of investment assets traded in 2013.
Adam Chapman, head of the National Automotive team at Knight Frank, who has provided advice on over 90% of all service area investment stock in the last five years, commented: “Service areas offer remarkably strong investment credentials, being extremely defensive, due to high barriers to entry, and providing a robust hedge against rising inflation. Yet opportunities to acquire comprehensive service area assets are extremely rare, with the majority of the network being held freehold.
“The sector has witnessed an extraordinary resurgence in the last decade, due in part to the introduction of major high street brands and a relaxation in government policy, and with increasing investor involvement, highly impressive ‘airport-like’ facilities are likely to one day be the norm.”
The Automotive team also advises on franchised vehicle dealerships, petrol filling stations and roadside retail, and works closely with Knight Frank’s Specialist Property Investment team, which advises on the full range of ‘alternative’ sectors including hotels, healthcare and student accommodation.
Charles Fletcher of Knight Frank’s Specialist Property Investment team, added: “This transaction highlights the continued appetite from institutional investors wishing to gain exposure to specialist sector assets which can offer excellent returns and diversity of income across their funds. This transaction highlights the importance of working with experts capable of providing the highest level of specialist sector knowledge.”