‘Rare and affordable’ Frankston fuel stop to be sold

An affordable service station investment at one of suburban Melbourne’s most prominent locations could spark a race to the pump for investors.

The BP service station at Frankston occupies a proven fuel and convenience site on Mooroonduc Hwy, at the doorstep of Frankston Private Hospital, immediately opposite Monash University’s Peninsula campus and at the southern gateway to Frankston CBD.

The property, which sits at the gateway to the Frankston CBD and is passed by more than 24,000 cars daily, has a 10 year lease to independent operator NUV Petroleum to July 2026, with two additional 10 year options.

With fuel investments continuing to perform impressively on the commercial property market, even throughout the coronavirus pandemic, Burgess Rawson director Raoul Holderhead says it is clear investors have them marked as an asset class to watch.

Holderhead says the Frankston property’s location, coupled with a predicted price point of around $2-2.1 million, makes for excellent investing.

“Last auction we also sold the Caltex at Moama in a similar price bracket, which was an outstanding result. If I’m spending my money, I’m buying this one, given the lease to 2026 plus the metropolitan location,” he says.

“It’s very rare and affordable metropolitan Melbourne offering, given the price tag and where it is.”

The service station occupies an 876 sqm site that has been a fuel retail location since the mid 1980s and has triple street frontage of more than 80 metres.

The asset was completely rebuilt in 1997, with new fibreglass tanks and lines installed.

It currently returns $119,245 per annum plus GST from NUV Petroleum, a growing independent operator with 29 fuel sites across Victoria, New South Wales and South Australia.

The tenant pays all outgoings, excluding land tax, while the lease also has fixed annual rent increases. Holderhead says a yield of around 6% is expected.

Published by RealCommercial.com.au