Chinese EV dealerships: A New Opportunity for Property Owners

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Chinese EV dealerships have arrived: how this trend presents a unique opportunity for commercial property owners

The electric vehicle (EV) market in Australia is undergoing a significant transformation, largely driven by the influx of Chinese EV brands entering the local market. Known for their ability to offer high-quality vehicles at competitive prices, these brands are not only changing the landscape of Australia’s EV market but also shaking up the commercial property sector.

Traditionally, car dealerships have clustered along major roads like Parramatta Road, the Great Western Highway and the Pacific Highway, creating hubs where customers can browse multiple brands in one trip. However, Chinese EV dealerships are breaking from this convention, seeking prime retail strip locations typically occupied by fashion retailers, luxury brands and hospitality businesses to capture high pedestrian traffic. Their aim is to engage directly with potential buyers in a retail environment, creating a showroom experience that feels more accessible and personal. This approach is markedly different from the traditional dealership model, where customers drive to a cluster of competitors to compare vehicles.

While this new trend is an exciting development in Sydney’s commercial property market, it also brings challenges and risks for landlords that must be carefully mitigated.

 

 

This emerging trend presents several benefits for landlords willing to embrace this unconventional tenant type: 

· Premium rents: Chinese EV dealerships understand they’re competing with established retail tenants for these prime locations and are prepared to offer above-market rents to secure the space. 

· Impressive fit-outs: These dealerships invest heavily in their showrooms, creating modern, polished, and high-end spaces that enhance the look and feel of the retail precinct. 

· Increasing demand: With multiple dealerships entering the market, landlords have an opportunity to diversify their tenant mix and tap into a growing industry. 

 

While the potential rewards are attractive, landlords should also be aware of the risks involved: 

· Unproven track record: Many of these brands are entering the Australian market for the first time, meaning they lack a track record of trade here. This raises questions about their long-term viability. 

· Specialised fit-outs: The purpose-built nature of these showrooms can make re-leasing the premises to a more generic tenant challenging if the dealership leaves. 

· Long-term commitments: With dealerships typically requesting long-term leases, landlords need to be confident about the tenant’s stability and the suitability of their business model for the location. 

 

Navigating this new trend requires experienced commercial agents who understand how to mitigate risks and maximise benefits. Here at Shead, we’ve already been approached by 4–5 Chinese EV dealerships looking for prime retail locations along Victoria Avenue. While this is an exciting development, we recognise the need to provide sound advice to landlords unfamiliar with this type of tenant.

Here’s how we help: 

· Securing guarantees: We recommend a substantial bank guarantee––such as 12 months’ rent upfront––to provide landlords with financial protection in case the tenant exits early. The idea is to offer our clients as much comfort as possible regarding the long-term viability of these tenants. This involves considering all possibilities, including worst-case scenarios.

· Mitigating fit-out risks: We carefully assess the tenant’s fit-out plans and provide advice on how to address the challenge of re-leasing the space if required. 

· Balancing risks and rewards: By negotiating generous lease terms and ensuring landlords are protected, we create win-win outcomes for both parties. 

 

The influx of Chinese EV dealerships signals a shift in the commercial property market, one that savvy landlords can capitalise on with the right guidance. As EV adoption continues to grow in Australia, the demand for these showroom spaces will only increase, providing opportunities for landlords to secure premium tenants willing to pay a premium price. 

At Shead Property , we understand the unique challenges and opportunities this trend presents. With our extensive experience, market knowledge and trusted relationships, we’re here to help landlords navigate this new era of commercial property with confidence. 

For advice on leasing to Chinese EV dealerships or other emerging tenant types, contact Bill Geroulis on 0413 100 200 or email bill@shead.com.au.

 

 

 

Here at Shead, we specialise in helping property investors identify opportunities with strong potential for growth and rental returns.

 

Our clients are fortunate in that Sydney’s North Shore––the area we proudly service––is considered a blue-chip location for living and investing. The area’s reputation for stability means it consistently outperforms more speculative or fringe markets, even during periods of market decline. This resilience applies to both property sales and leasing, offering investors greater confidence and security, even through challenging conditions. 

Whether you’re purchasing your first investment property or expanding your portfolio, our residential property investment experts are here to guide you every step of the way. Contact us today on 02 8448 1200 to discuss your investment goals and find the right property to maximise your returns. 

 

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