Kazan auto centres sold for grocery stores and offices

Experts say only big players and those who bet on second-hand cars have chances of surviving in the market

Kazan auto centres sold for grocery stores and offices
Photo: realnoevremya.ru

Car dealership centres are sold in Kazan: while car sales are falling, owners of buildings are actively getting rid of irrelevant real estate property or repurposing it. “I know cases of reusing the buildings of car dealership centres for offices, an exhibition centre and even a hostel,” noted authorised representative of the Russian Guild of Managers and Developers in Tatarstan, managing partner of Perfect Red Yelena Stryukova. Also, the market is getting largest — small car dealers are leaving it. Read more about where and what auto centres have changed or are changing their owners, what’s going on with the prices for these areas and who will have the least damage in Realnoe Vremya’s report.

Nobody but a creditor needs an expensive lot

The building of Luidor car dealership in Kazan was up for sale because of its owners’ debts — Avtomir company that went bankrupt in 2015. The starting price of the facility is 349,8 million rubles. Ford’s official service centre operates in the two-storey building.

Luidor is a large car holding from Nizhny Novgorod that entered the republic’s market in 2016. 115 people work in the centre. The size of the building that is being sold is over 4,000 square metres, it is located on a land parcel of more than 8,000 square metres. However, it was not exhibited for a long time — it was withdrawn from sale three days to the end of the auction.

“The secured lender agreed to leave the collateral,” Realnoe Vremya was told in Torgi-Ru Auction House.

Director General of A-Development Murat Akhmerov thinks that today the cost of the facility is too high even though it has a good location, which confirms the fall in price when applications were received. According to him, as early as three years ago when things in the car business were much more successful, the price for a square metre when selling buildings of car centres fluctuated between 50-60,000 rubes. And in this case, the value of the offer was almost 84,900 rubles per square metre. The buyers who have money are now waiting for an at least 30% discount. Deals can be sealed if the square metre falls to 50,000 rubles.

Realnoe Vremya contacted the owner of the business, Luidor-Kazan, for a comment. We asked to specify if the car centre will stay in the same place in case the building is sold. The reply will be published upon receipt.

Retail stores and Multi-Functional Centres instead of cars

As SPARK-Interfax says Luidor-Kazan that considers itself as the official dealer of the Gorky Car Plant and Ford service centre on the official website ended 2021 with profit: sales revenue totalled nearly 2,74 billion rubles, net profit is 8,8 million, though there was seen a slight tendency for a fall in the money flow.

However, the business of the bankrupt owner collapsed a long time ago, moreover, its first director and owner suffered from personal bankruptcy, it is former director and owner of Altyn group of dealerships Liron Latypov. And now many small car dealership centres will follow Altyn-Avto, which opened the biggest Suzuki auto centre in Kazan in 2012, and exit the business, thinks Realnoe Vremya’s expert Murat Akhmerov.

“Two car dealership centres on Chuykov Street were sold as early as four years ago,” says Murat Akhmerov. “Retailers, retail store chains Nakhodka, Clothes and Shoe Planet occupied their place. Car dealership centres of the bankrupt Akos were sold — stores are situated there too, a Multi-Functional Centre is in one of them. And I assume this tendency will stay: only the biggest players of TransTechService and KAN Avto will remain in the car market in the short run.

Car sales have seriously fallen because of the sanctions and the general economic situation, therefore many buildings of car dealerships will be repurposed, for instance, for retailing, upper floors can be used for offices. Only car washes and car repair shops can stay here. Perhaps, some car dealerships can continue working too like it happened to a building on Gorkovsky Shosse that started dealing with Chinese cars.

In addition, the expert noted that some car dealerships can be repurposed to sell second-hand cars, but again, he stressed, first of all big players will occupy this niche.

Auto centres can be repurposed even into a hostel but if it is within a walking distance

“I know cases of reusing buildings of car dealerships for office, an exhibition centre and even a hostel,” says authorised representative of the Russian Guild of Managers and Developers in Tatarstan, managing partner of Perfect Red Yelena Stryukova. “In fact, technical characteristics of the building built for a car dealership are similar to the characteristics of a shopping centre: big display windows, reinforced floor designed for a big load, the technical zone for cars to enter the service shop is comparable with an unloading zone. As for the demand for these facilities and rent rates, like in any real estate property, everything will greatly depend on the location. According to my observations, the exposition term of buildings of car dealerships is quite long, firstly, because of their location, secondly, because of the specific configuration of the areas.”

As a rule, she noted that car dealerships are designed for car traffic and aren’t always located conveniently from a perspective of walking distance, while this kind of facilities placed in the city centre were repurposed a long time ago.

Photo: realnoevremya.ru

Shop till you drop

Another tendency has appeared just recently. A rental business with a tenant — a car dealership — is up for sale on Vasilchenko Street, in the Kazan industrial zone. The ad says the building with RT-motors car dealership can be bought in the building for 80 million rubles.

However, Murat Akhmerov doubts that this offer is tempting enough. In his opinion, a rental business in the industrial zone is quite a specific business, it is not easy to pick tenants who are happy with the location, and relations with the existing tenant will have to be built too.

The seller of the one-tenth part of a building on Agrarnaya Street where the auctioneer of CarPrice second-hand car centre, an insurance centre and a service centre are based also has a tough task. Otkritie FC is selling the share — perhaps, it is the debtor’s property.

Murat Akhmetov thinks that the owners of the other nine-tenth of the building can buy the share in the building because they will unlikely want another co-owner to come.

Inna Serova