Pumping petrol station market to see 186 projects completed in 2019
A strong development pipeline of new petrol stations across Australia is set to create ongoing investment opportunities, despite continued headwinds about electric vehicles entering the mainstream private car market.
26 Jun 2019
This is one of the conclusions from a new CBRE market review, which highlights 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.
“Perth’s road network is undergoing a major transformation with several freeway upgrades and extensions underway, which is ultimately changing and improving the way people travel. This shift is prompting petrol station developers to think and act ahead of the curve with site select to take advantage of this,” 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.”
Over the past six months, more than $62 million of petrol station investments sold across Western Australia, with tier one tenancies including 7-Eleven, Caltex and Coles Express resulting in an average yield of 6.2%.
Looking at the supply pipeline, 38 petrol stations are mooted this year, with an additional 26 earmarked for construction across the state in 2020.
Underpinning the strengthening confidence in Australia’s petrol station market is the continued prevalence of private car use. 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.
Evidencing the increased activity in the WA’s service station investment market, BP Sawyers Valley is one of the latest service stations to hit the market.
Completed in June this year, the 5,295sqm property is anchored by a 15-year lease to Epic Petroleum (with additional options). The property is prominently situated on the corner of Great Eastern Highway and Sawyers Road – the primary thoroughfare for vehicles travelling east from Perth, capturing over 15,000 vehicles daily.
“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. For Australian/international news or global stories, follow us on Twitter: @cbreaustralia
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CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2018 revenue). The company has more than 90,000 employees (excluding affiliates) and serves real estate investors and occupiers through more than 480 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.
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About CBRE Group, Inc.
CBRE Group, Inc. (NYSE: CBRE), a Fortune 500 and S&P 500 company headquartered in Dallas, is the world’s largest commercial real estate services and investment firm (based on 2021 revenue). The company has more than 105,000 employees (excluding Turner & Townsend employees) serving clients in more than 100 countries. CBRE serves a diverse range of clients with an integrated suite of services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at https://www.cbre.com.