Business Outlook 2020 reports robust activity for petrol stations
Continued rationalisation of large portfolios, reinvestment and disposal of surplus assets remained key themes across the retail sector in 2019, presenting both corporate and independent operators with ample opportunity to grow their businesses. Shifts in consumer shopping habits away from the high street and rising operating costs underly this transactional activity, according to the latest annual report by specialist business property advisor, Christie & Co.
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The report, ‘Business Outlook 2020: Focus on Business’ reflects on the themes, activity and challenges of the previous year and forecasts what 2020 might bring across the sectors in which Christie & Co operates, including convenience retail.
The petrol filling station market faces similar dynamics to convenience. The report describes developments in alternative fuel vehicles (AFVs) as a forthcoming challenge to the sector, in light of the Government pushing on with its ‘Road to Zero’ strategy to cut CO2 emissions. However, recent reports of modest increases in electric vehicle (EVs) sales suggest petrol filling stations will remain relevant for the foreseeable future.
Transactional activity remained robust throughout 2019, which is evidence there remains strong ongoing interest in PFS assets amongst investors. Average prices remained economically positive throughout 2019 across most sectors in which Christie & Co specialises, with Retail seeing a 10.8% rise in transaction numbers and 0.5% increase in average prices paid.
Looking to the year ahead, the report also outlines Christie & Co’s market predictions which are:
- Ongoing strong demand for petrol filling stations, with an increase in overseas investment in the UK fuel market
- We expect to see a rise in convenience franchising as suppliers make attractive offers, inviting retailers to participate in premium brands, such a Co-operative Food
- There will be continued rationalisation of large portfolios by the multiples, whilst ongoing acquisition programmes will drive better performance in their top stores – necessary to mitigate rising wages and other operating costs
Steve Rodell, Managing Director – Retail at Christie & Co comments, “We started the year slowly with much political uncertainty possibly affecting investor confidence. That seems to have evaporated in the second half and we finished the year strongly, culminating with the completion of Project Chiltern – the sale of Cornwall Garage Group. With many projects in the pipeline we look forward an exciting 2020.”