Western Sydney service station with fast-food outlet tipped to sell for $8.5 million
A BP service station with an Oporto fast-food outlet in western Sydney could sell for $8.5 million when they go to auction on Tuesday.
The asset at 505 Cowpasture Road, Hoxton Park, is on a new 10-year lease until 2028, generating more than $440,000 a year, with options until 2038.
It is expected to sell on a 5.25 per cent yield.
Burgess Rawson selling agent Michael Gilbert said it was “incredibly rare” to see a new service station with a fast food outlet located at a busy junction.
“This is the last service station before you get onto the motorway,” he said.
More than 100 groups have enquired on the 2586-square-metre property, with “nearly all (being) private investors”.
“They’re people who’ve got a strong belief in western Sydney and southwest Sydney,” Mr Gilbert said.
The agent added that fast-food properties were considered to be safe investments.
“The fast food market is not one that can be disturbed by the internet and frankly it’s something that benefits from the internet with home delivery like Uber Eats and things like that,” he said.
And service stations are popular because they can provide “longer term development potential”.
“As far as service stations are concerned, they’re generally large blocks of land in prominent locations,” Mr Gilbert said.
“There are queries over where we’re going to be in 30 years’ time, but if you underpin what is fundamentally good real estate, well located on busy roads, you’re always going to be safe.”
Another property comprised of two fast-food outlets, Red Rooster and Domino’s, at 169 Meadows Road, Mount Pritchard, has received about 50 inquiries, Burgess Rawson selling agent Rhys Parker said.
Passive investors and people trying to enter the southwest Sydney market have shown interest in the 2006-square-metre site.
“There’s been a lot of interest because it’s in that southwest Sydney growth corridor and two really good fast food covenants in an area that’s really popular with young families so it’s the right thing in the right location,” Mr Parker said.
The assets are two of 20 commercial properties across NSW, ACT and Queensland to go under the hammer in the agency’s final portfolio auction of the year. Price expectations range from $700,000 to more than $10 million.
The portfolio auction will be held at Doltone House Hyde Park, 181 Elizabeth Street, Sydney, from 11am.
Go to Commercial Real Estate’s Facebook page to watch the first two properties being auctioned live.
