Petrol Station

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Despite continued headwinds about electric vehicles entering the mainstream private car market, there has been a strong development pipeline of new petrol stations across Australia, according to a recent report from CBRE.
A new CBRE market review highlighted that 186 new petrol stations will be built nationally over the next 12 months, including 38 in Western Australia.
CBRE’s WA petrol station specialist Anthony Del Borrello said that the development supply pipeline was being driven by Perth’s changing road networks and strengthening investor demand.
Mr Del Borrello said, "service stations present a compelling investment opportunity, based on their strong tenancy profiles – anchored by national operators such as 7-Eleven, Caltex and Viva Energy – and long leases.”
“These tenants are at the forefront of the emerging electric car industry and their confidence in the long-term expansion of their existing network in WA is providing investors the confidence that there will be no market disruption in the medium term.”
The report notes, over the past six months, more than $62 million of petrol station investments sold across Western Australia, with tenancies including 7-Eleven, Caltex and Coles Express resulting in an average yield of 6.2%.
In WA, 38 petrol stations are mooted this year, with an additional 26 earmarked for construction across the state in 2020.
While the proportion of electric vehicles in production in Australia is expected to reach 50% by the 2030s, translating to less than 14% of cars being electric, there will be a continued need for petrol filling stations into the future.
BP Sawyers Valley is one of the latest service stations to hit the WA market.
Completed in June this year, the 5,295 sqm property is anchored by a 15-year lease to Epic Petroleum (with additional options).
The property is situated on the corner of Great Eastern Highway and Sawyers Road.
“This property represents the first BP service station to be offered for sale in Perth in at least three and a half years. On the back of continued momentum in the service station investment market, the opportunity to acquire this long-leased asset is expected to generate competitive buyer interest,” Mr Del Borrello added.
WA service station transactions between June 2018 – June 2019:
<img src="https://www.urban.com.au/images/2019/6/26/Petrol%20Stations%202019.JPG" alt="">
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186 Australian petrol stations set for completion in 2019: CBRE

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The petrol station market is set to see 186 projects completed in 2019, despite continued headwinds about electric vehicles entering the mainstream private car market. 
A new CBRE market review found Queensland would lead the way with 58 new petrol stations followed by Victoria with 43 and New South Wales with 38.
CBRE’s petrol station specialist Joseph Du Rieu acknowledged that an increase in supply of this magnitude would typically result in reduced pressure on prices, however, given these developments were being staggered, pricing had either remained steady or slightly in favour of vendors. 
“The number of new projects coming online reflects the confidence major companies have in the sector, where they typically look to enter into 15-year leases – resonating with the investor market,” explained Mr Du Rieu.  
CBRE’s recent transaction of a new 7-Eleven service station in Werribee (top), which sold for $5.93 million to a private Melbourne based investor on a yield of 5.04%, further highlights this trend. 
The newly built service station, which features a 15-year net lease with fixed annual increases, attracted both domestic and international buyers. 
Du Rieu noted that CBRE was continuing to field strong demand from both private and institutional investors for petrol station assets.
 
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/5/29/Petrol3.jpg" alt="">
“Given the growth, security and prominence of these landholdings, and the modern technology around the environmental aspect, as investors look to the future of the market they are recognising the alternative retail and commercial value of these sites,” Mr Du Rieu said. 
Private cars continue to be the most popular means of transport in Australia, with 66.1% of Australians either driving to work or being a passenger in a private car – an increase from 65% in 2011. 
While the proportion of electric vehicles in production in Australia is expected to reach 50% by the 2030s, translating to less than 14% of cars being electric, there will be a continued need for petrol filling stations into the future. 
However, the increase in electric vehicle production has been enough to see a shift in the way major energy companies are operating, with Shell being one of the first to make a move.  
In the past 12-months, Shell has installed fast charging terminals at 80 Shell petrol stations across the UK, Netherlands and China, offering a Shell Recharge service that charges an electric vehicle in just 30 minutes.  
“With potential for the implementation of fast charging services in future Australian petrol stations, it is likely that operators will continue to grow their retail offering and build on the services they provide customers while they charge their cars.” 
Close to $40 million of petrol station investments sold across Australia in Q1, with tier one tenancies like Coles Express and 7-Eleven resulting in strong yields of less than 6% for assets in strong inner metropolitan locations with attractive underlying land components. 
 
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Pumping petrol station market to see 186 projects completed in 2019

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A Gold Coast United Labrador petrol station has been sold for $8,975,000 to a private investor.
Located six kilometres north of Surfers Paradise, the station is 225 square metres with a canopy area and four numbers bowers with 28 pumps, capable of servicing eight vehicles at a time
There is a total of 446 square metres of gross lettable area.
The sale realises a full leased initial yield of 5.12 percent.
Built in 2016, the property also contains 284 square metres of sub-leased tenancies.
JLL’s Doug Rapson and Campbell Bowers from Retail Investments managed the offer to market and auction.
Rapson said the sale pointed to an upturn in the strength and demand of the Gold Coast market.
“As the Gold Coast continues to transition from a seasonal tourism destination, to a mature diversified city, the demand for public and private investment into residential, commercial and infrastructure projects will increase,” he said.
“We strongly believe that the Gold Coast will continue to outperform the broader QLD economy for the foreseeable future and that major institutional investment will continue to gain momentum.”
 
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