This article is from the Australian Property Journal archive
SERVICES centres continue to draw in capital from private investors, after five assets were traded for a combined $50 million.
The five sales ranged in price from $4 million all the way through to $16.3 million, with the properties located across Victoria, NSW and Queensland.
Justin Dowers, Kevin Tong, Rorey James, Tom Moreland, Michael Collins, James Freemantle, Harry Curtain and Brett O’Neill from Stonebridge negotiated the sales.
“We have seen a real resurgence in confidence for convenience assets in the last few months with many top investment firms and advisors signalling that now may be a strategic buying window,” said James.
“This is partly driven by the rare opportunity to purchase assets below their replacement cost together with a general view of the longer-term viability of these assets, especially those in core locations.”
Westernport Service Centre in Victoria was the top sale, coming in at $16,300,000 for a strong yield of 5.44% after a competitive campaign.
The circa 2-hectare property was fully leased at the time of transaction, with tenants including a BP, Carl’s Jr. and Souvlaki GR.
“The sale represented a strong yield for a service centre investment of this scale. The buyer was motivated to acquire the asset before June 30 due to the upcoming stamp duty reforms in Victoria,” said Tong.
“Given the size of the asset and the scarcity of blue-chip retail opportunities, many groups who bid had previously engaged with us in shopping centre or supermarket campaigns.”
A 7-Eleven in Melton South, VIC was traded for $11,111,000 on a 6.39% yield, as reported by Australian Property Journal in May.
“There have been several strong service station transactions completed by our team in recent months, demonstrating the market’s confidence in the fuel and convenience sector,” added Dowers.
“Assets that are well-located with large landholdings, like the Westernport Service Centre, have consistently shown strong transaction results”
The Viva Shell Coles Express in Mount Annan in NSW went for $10.1 million on a 6% yield, while the 7-Eleven in Eight Mile Plains, QLD sold for $8 million on a 6.41% yield. While an EG Fuel in Oakleigh South, VIC selling for $4 million on a 6.25% yield.
“The campaign for Viva Shell Coles Express Mount Annan has been a strong barometer for the depth of interest that exists for prime Sydney metro fuel & convenience retail assets,” said Collins.
“Despite the 2-year WALE, we received a flood of enquiry from our national database of investors who all saw considerable upside in the site’s large land area, strong land value, and high-profile location.”
Stonebridge anticipates service station transactions will continue to yield strong results, with their latest July National Portfolio featuring a Brisbane-based 7-Eleven on a corner site in the Acacia Ridge industrial precinct and a Melbourne Truck Stop with major tenants in BP and KFC.
Backing this up, a recent Burgess Rawson portfolio event saw an investor pay $7.985 million for the brand-new 2,687 sqm Ampol service station and Oporto restaurant site in Caboolture, with a 6.07% yield.
While petrol station assets continue to see values rise, with Charter Hall Retail REIT seeing a 4.1% increase in the value of its BP fuel stations portfolio, with the October external independent valuations equating to a $21.3 million increase in value, while the cap rate inched upwards from 4.72% to 4.77%.
