Combined Motor Holdings is turning some of its biggest fixed costs into assets.

The South African motor group plans to spend R745 million ($46 million) to take ownership of 13 properties where its dealerships already operate, a move that could change how it pays for part of its retail network.

Rather than opening new sites, CMH is buying the buildings and land behind established dealerships in Gauteng and KwaZulu-Natal. The move comes after years of carrying rental costs for properties used by its businesses.

It also gives CMH an opportunity to put some of its cash reserves to work. The properties have an independent combined valuation of R780 million($48 million), meaning the group is agreeing to pay about R35 million($2.16 million) less than their assessed value.

CMH gets properties below valuation

The 13 properties have been valued at R780 million($48 million), putting the purchase price R35 million($2.16 million), or about 4.5%, below their assessed market value.

CMH will use R395 million($24.36 million) of its existing cash and a R350 million($22 million) bank loan to fund the acquisition. The company said it has held surplus cash above its operating needs for several years.

The deal follows a R192 million($12 million) share buyback completed in December 2025.

CMH had more than R1 billion($62 million) in cash on its balance sheet and said the property purchase is expected to benefit future earnings as avoided rental costs outweigh financing expenses.

Related-party deal faces shareholder vote

The transaction requires additional scrutiny because some of the sellers are CMH executives. Under JSE rules, it is classified as a Category 2 related-party transaction. Independent shareholders will therefore vote on the deal, while the directors involved in the sale will not be allowed to vote.

The transaction also requires the R350 million($22 million) loan, shareholder approval and unconditional Competition Authorities approval.

CMH takes ownership of dealership sites

CMH was founded by Jebb McIntosh and Maldwyn Zimmerman and listed on the JSE Main Board in 1987.

It has since grown into a South African motor and mobility group representing 36 vehicle brands across more than 100 dealerships, with annual revenue of more than R14 billion ($865.9 million) and a rental fleet of more than 9,000 vehicles.

At the end of February 2026, CMH reported lease liabilities of R544.7 million ($33.6 million).

Buying the properties will allow the group to replace some rental payments with ownership of the underlying assets while keeping its dealerships at their existing locations.