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Petrol stations sell on yields below 6 per cent

February 12, 2018

Asian investors paid $11m for the Cranbourne BP Photo: Supplied

Private investors have continued to pour money into petrol station assets, with four selling in Victoria for a combined $30 million in January.

The four petrol stations – three in suburban Melbourne and one in Ballarat – all traded on yields well below 6 per cent with two of the buyers mainland Chinese investors.

In the biggest of the four acquisitions, an Asian investor paid $11 million for the BP in Cranbourne owned by petrol king Jason Be’s Jasbe Petroleum, which operates across 25 locations in NSW and Victoria.

The BP Cranbourne sold on a yield of 5.9 per cent while another BP in Vermont, leased to Jasbe and privately owned, sold to an Asian investor for $6.1 million on a 5.6 per cent yield.

In the two other deals, both acquired by local investors, a 7-Eleven petrol station in Ballarat sold for $5 million on a 5.3 per cent yield and a United Petroleum in Dandenong sold for $7.3 million on a 5.5 per cent yield.

Jasbe Petroleum director Miro Sloup said the company was divesting some of its assets so it could recycle capital into the business. He said both the BP stations were underpinned by residential population growth expectations.

“The BP adjacent to the Springhill Shopping Centre in Cranbourne North is strategically located to provide convenience to the consumer linking the service station with McDonald’s, the shopping centre and the surrounding residential catchment,” Mr Sloup said.

All four deals were negotiated by Joseph Du Rieu and Kevin Tong of CBRE.

“While there continues to be some conjecture in the buyer market for service station investments with the ever increasing threat of electric vehicles, our team remains bullish on the sector given electric cars represents less than 1 per cent of private passenger vehicles in Australia currently,” Mr Du Rieu said.

“The transactions of both BP Vermont and BP Cranbourne to Asian investors late last year further highlighted the confidence investors are continuing to have in the service station sector, those who continue to be drawn to the long-term leases with fixed annual increases on prominent parcels of land,” Mr Tong said.

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