More than $1 billion worth of service stations changed hands last year and demand will be equally strong this year, even as electric vehicle sales surge.
Significantly higher returns will be on offer for investors in service stations this year after average yields ballooned 150 basis points last year on the back of higher mortgage rates and lower valuations.
“This correction is likely to see the need for some owners to bring their assets to the market which will add to the portfolio transaction activity anticipated in 2023,” Ms Rader added.given they are typically offered with long “set and forget” leases to national operators such as Coles Express, Woolworths Caltex, 7-Eleven and United.
Andrew Turner, founder and CEO of Banner Asset Management, which runs a $200 million-plus service station and convenience store fund, said Australia’s slow take-up of EVs meant fuel companies were still committing to 10- to 15-year leases, suggesting they remained comfortable with their business model.“However, as demand for alternate fuels increases, these service stations will likely be transitioned to incorporate EV charging stations and offer other alternative fuel solutions,” he said.
Even if electric vehicles become mainstream, the most rapid charging still takes at least half an hour.
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