Is the petrol station investment market evolving?

In recent years, the petrol filling station investment market has suffered from some stigma attached to the promotion of Electric Vehicles (EVs) on trade, along with other environmental concerns, increased borrowing costs and a trend towards larger sites that can offer a broader range of services. Investment transaction volumes reached a low point in 2024, which may also be due to the fiscal environment, but the first three quarters of 2025 have already seen more sales than the whole of last year. Institutional investors are still largely absent from the market, despite the attraction of long leases and strong tenant covenants.

So, what’s changed? The answer lies in the underlying dynamics of the petrol filling station sector which, over the last ten to fifteen years, has been responding to the challenge of diversification in the face of Government policy, changing consumer habits and a technological revolution.

Many smaller sites have found it physically difficult to add EV charging to their existing forecourts. Operators have also struggled to justify the significant expenditure required and poor financial return from EV charging.  However, with many customers now shopping less frequently at larger supermarkets and making more visits to local convenience stores, especially if the product range and quality is strong, forecourt operators have sought to capitalise on this trend by increasing shop sizes, often converting former MOT garage workshops and introducing household brands such as Co-op.

An increased demand for car valeting services, combined with the tightening of legislation around the operation of hand car washes, has led to a resurgence in the use of automatic car washes, whilst jet washes have also proved a popular addition to forecourts in many locations. Additional services, such as parcel lockers and laundry pods, also serve to attract additional non-fuel custom.

Food and coffee to go is now seen as an essential part of any petrol filling station (especially those that do offer EV charging) and in many cases, shops have been further extended to include a bakery or sandwich offering, such as Greggs, Subway or own brand.

The diversification of income streams at many petrol filling stations, coupled with a general increase in historically low fuel margins, and the slow adoption of battery EVs, has served to support the demand for these types of businesses from both existing and new operators.

Occupational demand in the sector is clearly strong and, in contrast to much of the wider retail sector, petrol filling station rents have been increasing steadily over the last ten years. Perhaps it’s not surprising then that, following a repricing of investments during 2022-2023 and a subsequent fall in borrowing costs, some investors now view the sector as offering good value.

Private investors looking for relatively high yields in comparison with traditional savings rates, as well as operators with prior knowledge of the sector, have become increasingly active during 2025. In fact, with a limited supply of high-quality freehold petrol filling stations for sale, some operators now regard investment properties with unexpired leases of five to ten years as being an acceptable medium to long-term business opportunity with limited short-term risk.

We have seen evidence of this trend in the recent marketing of an investment in South Wales, which received 11 offers within one month of marketing, all of which were made by operators. The highest offer was 10% above our guide price.

High value petrol filling station investments, with modern design specifications and layout, rarely come to the open market. However, spring 2025 completions in Telford and Derby, let to Asda Express Limited with unexpired terms of 25-26 years and indexed rents, suggest that the prime end of the market is active at net initial yields of around 5.75%.

Whilst older and smaller petrol filling station investments in weaker trading locations are less attractive to operators, there are still private investors willing to buy at net yields of 7.0% - 9.0%, but debt finance may be less readily available for these assets.

The continued resilience of the petrol filling station sector is providing investors and operators with increased levels of confidence. The composition of buyers has evolved over the last 18 months, and we expect this to support further investment sales during the remainder of 2025 and into 2026.  

At Christie & Co, we have a dedicated retail investment team who can advise on options and opportunities for your business. For a confidential chat about your forecourt property and investments, contact Nick Bywater at nick.bywater@christie.com  or +44 7526 176 388.