German car parts supplier Brose is expanding its UK operations by leasing a 75,000sq ft Coventry industrial unit from property investment company Palace Capital. Among the automotive company’s existing customers are nearby Jaguar Land Rover and Nissan on Wearside.
Palace Capital — which traditionally invests in Britain’s secondary commercial property market outside London — has agreed to lease the unit to Brose UK on an annual rent of £325,000. The initial lease is for five years, with an option to renew for a further five.
“We are delighted to have signed this lease with Brose for this large industrial unit,” commented Neil Sinclair, managing director of the AIM quoted Palace Capital. “This lease demonstrates the active management of the portfolio which we are undertaking.”
Coventry has a strong local economy and is a key supply hub for the country’s entire car industry. Brose, an existing sub-tenant of the property company, is part of a large German automotive components group that employs 22,000 people worldwide and reported a 2013 turnover of €4.7bn (£3.7bn). About to launch a range of new products, it supplies JLR and Nissan with a range of window regulators and adjuster systems for front and rear seats.
The 1999-constructed industrial unit the German company has leased is known as Courtauld House and forms part of a complex on the, acquired by Palace Capital as part of the Sequel portfolio it bought last year from Quintain Estates and Development for almost £40m. Consisting of 24 mixed-use commercial properties in England and Wales the portfolio was valued at £44m and was claimed to produce at least £5.2m a year in rent.
The Brose property was previously let to Bowater Building Products which recently exercised a break clause in its existing lease, triggering a penalty payment equivalent to four months’ rent.
Palace Capital also owns a modern 18,000sq ft office building on the same Foleshill site. This building will become vacant in August, with the current tenant still liable for rent until February next. It is currently being refurbished by the existing tenant and will be put on the market early September 2014.
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