When it comes to commercial real estate, COVID-19 has certainly impacted several sectors, many of which are still uncertain. However, some areas defied the odds to buck the trend – and service stations (or fuel stations) is one of them.
Service stations have thrived over the past 12 months as a business (and an investment). Many people avoided public transport for travel and others filled their tanks to escape to more rural settings. This rise of domestic travel saw fuel stations increase their profits, and it was further heightened by the growth in convenience retail.
Many savvy investors had their eyes on fuel stations before the pandemic hit. Interested investors faced an entry point buy-in of around two million dollars, but it was a sound investment. Historically, fuel stations have longer leases, consistently perform, and are future-proof due to their prime locations. Investors want to invest wisely and in businesses that are lockdown-resistant.
With the rise of electric cars growing, fuel stations are taking steps to soften the risk by integrating charging sites with existing locations. Australia may be behind the rest of the globe in the uptake of electric vehicles, but estimates place the uptake at up to 60% by 2050. No matter the changes expected to transportation, fuel stations offer an essential service. Whether you stop in to fill your petrol tank, charge your electric car, or pick up snacks.
To determine the size of the prize, you need only look at the number of service stations in Australia versus the number of vehicles on the road. There are over 6,500 service stations in Australia. Per capita, Australia has one of the largest vehicle shares globally. There are almost 800 vehicles on the road per 1,000 Austrians. Every state and territory saw an increase in vehicle registrations in 2020, and the expectation for 2021 is much the same.
Essentially, fuel stations provide a strong investment opportunity for wise investors, especially those stations that also provide convenience retailing. If you want to find out more, why not get in touch with our team at McGees Property Brisbane to discuss your investment requirements. We’ll be happy to help!
*Disclaimer: This article is for general information only and should not be relied on as advice. You should consider your personal situation and seek advice that is specific to your circumstances before making any decisions based on this information. If there are any issues you would like us to discuss with us arising from this article, please contact us*