Case Study: Real Estate Advisory for Nissan Motor Co – Liverpool Site

Client: Nissan Motor Co (Australia) Pty Ltd

Location: Liverpool, New South Wales

Background

Nissan sought expert advice regarding a proposed multi-million capital investment at it’s

Liverpool site NSW, where a local Nissan dealership operated on leased premises. Nissan’s

objective was to transform the site into a flagship showroom and service centre in alignment

with its national Retail Visual Identification Program, despite not owning the property

directly.

The property, strategically located at a high-traffic intersection near Liverpool Town Centre,

was owned by a third party and leased by a local Nissan Dealer. Nissan proposed a three-

party development agreement involving itself, the dealer, and the property owner.

Project Objectives

 Assess the commercial terms of the draft Nissan Dealer Premium Site Development

Agreement.

 Provide advice on how Nissan might secure its capital investment on a property it

does not own.

 Evaluate legal and financial risks inherent in the arrangement.

 Recommend structural options for Nissan to mitigate risk and ensure repayment of the

development fee.

Key Challenges

 Nissan had no legal title to the property or formal leasing rights.

 The dealer’s financial capacity was limited, with little collateral beyond business

goodwill.

 The property owner had no formal obligation to invest beyond a $300,000

contribution.

 Nissan bore the risk of funding significant upgrades to a property it neither owned nor

leased.

Strategic Advice Provided

1. Review of Development Agreement

Nissan would fund the capital works upfront and be repaid over 8 years by the dealer,

with interest. However, there were limited controls on repayment timing and

insufficient security if the dealer defaulted.

2. Security Options Analysis

o With Dealer Only

Suggested assigning the lease to Nissan, enabling them to control the property

and mitigate risk. Dealer would repay through structured annual payments.

o With Property Owner

Considered acquiring part or full ownership, or negotiating a new lease or

ground lease. However, the owner showed no interest in relinquishing control

or providing mortgage security.

o Three-Party Arrangements

Explored structuring Nissan as head lessee or lender, secured by a mortgage

on title. Also considered implementing a ground lease to secure long-term

control and ownership of improvements.

3. Commercial Risk Evaluation

Identified key risks in payment structure, ownership of improvements, and limited

enforceability of developer rights under the draft agreement. Recommended stronger

contractual clarity and repayment security mechanisms.

Outcomes & Recommendations

 Renegotiate lease terms with either the dealer or property owner to gain legal and

operational control of the site.

 Seek legal right of recourse for repayment defaults, and clearly define repayment

schedules.

 Secure collateral or guarantees, preferably through lease assignment or registered

interest on title.

 Consider establishing first right of refusal provisions at market value, determined via

independent valuation.

 Approach the property owner directly to understand potential motivations and

commercial levers for cooperation.

Impact

The advisory provided Nissan with a clear understanding of the risks, commercial

implications, and structural options for securing its proposed multi-million investment. This

enabled informed decision-making and negotiation strategy development to protect brand

equity, commercial returns, and future site control.