Developer Interest Propels Service Station Asset Class

Ampol’s recent announcement it has entered into a funding agreement with the Australian Renewable Energy Agency to develop a national, fast-charging network to power up electric vehicles shows times are changing for petrol stations.

Under the arrangement, Ampol will construct fast-charging bays at more than 100 sites across the country.

It’s a clear move by the fuel business to embrace the future. It’s also smart, if a 2019 report by professional services firm Boston Consulting Group, Is there a future for service stations?, is anything to go by.

Jamie Perlinger, director of commercial real estate firm Burgess Rawson, agrees service stations are focused on broadening their retail offering. He has transacted numerous service stations over time, especially 7-Elevens.

“United, Viva and now Ampol have made a really big effort to upgrade their convenience offering. We’re now even seeing Aldi open outlets at metro and smaller sites.”

The investors Perlinger typically deals with include high-net-worth individuals, families, syndicates and self-managed super funds. But there are a number of different investment models through which service stations are transacted.

Investment houses sometimes pick up a portfolio of assets. For instance, Charter Hall has an interest in a portfolio of Caltex and BP servos. By contrast, Ampol own the majority of their sites. Some service stations are also owner-occupied.

Victoria Padey, the fund manager for Australian Unity’s Diversified Property Fund, says service stations are an attractive defensive investment in the current environment.

Australian Unity’s Fund owns a twin service station centre at Wyong on a prime stretch of the M1 Pacific Motorway on the NSW Central Coast between Sydney and Newcastle.

The properties include two 24-hour service stations, retail outlets, restaurants and dining facilities.