Investors re-fuel with Queensland petrol stations

Fuel isn’t the only commodity with prices on the rise in Queensland, with a lack of supply putting petrol stations in investors’ sights.

More than 60 investors showed interest in a Freedom Fuels petrol station at Redbank Plains, a suburb in Brisbane’s south west, which sold under the the hammer at a Colliers International auction for $3.95 million to a Newcastle-based private investor.

Colliers International’s Richard Blanch and Hunter Higgins say the property at 181 Kruger Parade, which was sold on behalf of syndicator OzProp, attracted interest from both local and interstate groups.

Sale surge: Petrol station owners rush to cash in

The property was hotly contested due to its 15-year term lease agreement with Freedom Fuels, a subsidiary of multi-billion dollar Japanese company Idemitsu Kosan. The lease expires in 2029,” Blanch says.

“Fuel companies sign secure, long-term leases and cover a lot of the overheads, making them attractive to private investors looking for a long-term passive investment.”

Fuel providers are looking for high residential growth areas or areas that have gone through recent planning changes that facilitate growth

“The strength of the market is apparent, with demand coming from local and interstate parties, particularly for properties such as this with long term lease in place to a high profile tenant.

“A lot of interstate private investors see Queensland very attractive with comparatively softer yields to Sydney and Melbourne.”

But Higgins says the depth of purchasers currently looking for further opportunities in the market is quickly sharpening yields in Queensland.

“In line with population growth and new developments in south-east Queensland, we also see growth in number of new petrol stations,” he says.

A BP service station in Capalaba East sold for $3.65 million.

“Fuel providers are looking for high residential growth areas or areas that have gone through recent planning changes that facilitate growth.”

“According to Cordells there are over 100 potential new or redeveloped service stations around Queensland that have been recently delivered or are in (the) planning and development stage.

“Leading the pack in terms of new sites are 7-Eleven, Puma, Caltex and Viva Energy (Shell).”

The sale comes shortly after a BP service station in Capalaba East, a suburb in Brisbane’s south east, sold for $3.65 million.

A lot of interstate private investors see Queensland very attractive with comparatively softer yields to Sydney and Melbourne

The 2506sqm site on Old Cleveland Rd was sold with vacant possession to a Brisbane-based developer.

“We had over 50 enquiries on the property and strong tenant interest, which resulted in several offers in writing on the first day,” Knight Frank’s director of service station sales Jason March says.

The new owners of BP Capalaba East have since negotiated a 15-year lease, also with Freedom Fuels.

“The service station industry has seen major changes in the last 40 years. The days of the modest corner station with driveway service are long gone,” March says.

“Now, petrol stations offer a one-stop shop for consumers, many open 24/7, increasing their revenue stream and turning higher profits.”

“Because of this, we’re seeing a resurgence in the service station market, with new service station developments being built, existing sites being re-tanked and upgraded throughout Australia.”