Petrol Filling Stations
We are the leading agents, valuers and consultants in various specialist sectors that involve operational real estate. This includes Petrol Filling Stations, with over 300 professionals across Europe. If you are interested in finding out more about petrol stations get in touch with us.
Steve Rodell MRICS
Managing Director Retail
020 7227 0759
The forecourt market continues to evolve and bloom, delivering consistent growth over the past three years. For some owners, the value of their forecourt is the highest they’ve seen. Some took advantage of increased demand from a wide pool of buyers and this meant prices achieved last year were consistently strong, and this is likely to continue this year.
This is largely the result of strong trading fundamentals supported by year on year growth shown in trading records. Good quality on-site property, healthy fuel margins and burgeoning convenience operations all combine to make forecourts an attractive proposition, especially in the current low interest rate environment.
Of the 8,459 UK petrol stations 68% are now in the hands of independent dealers and the top five groups own 28% between them. The largest operators by volume remain the supermarkets, which sell on average around 11 million litres of fuel per site.
We expect both companies to dispose of their remaining assets that do not fit core strategy, but only where there is a strategic reason such as a lucrative supply deal or a mutually agreeable swap. Private equity houses have invested in three of the five biggest groups in recent years and they have grown further by acquiring other independents which has fuelled group deal activity. High volume single site deals were also a significant feature of 2017 as those owners that tested the water were pleasantly surprised by the prices achieved, usually after competitive bidding. It remains to be seen whether 2018 will follow suit but there appears to be no let-up in appetite for such sites.
The announcement in July that the Government is committed to banning the sale of all new diesel and petrol cars by 2040 is unlikely to have any short-term impact, although it may cause those 24% of landlords who have a long-term lease in place to look more closely at the future of their investment. If they decide to diversify their risk, we could see a significant number of PFS investment deals come to market.
With comparatively low margins on fuel, many operators are focussed on expanding their retail business to attract more customers into the shop. Last year the total value of forecourt convenience sales was around £4bn.
Around 3,500 petrol stations now have a symbol branded or national chain convenience store and many now also have branded food to go operations such as Subway, Greggs and various well-known coffee brands. This is very much seen as the long term solution to the inevitable decline in fuel sales that will come on the back of alternative fuelled vehicles.
On the technology side, we expect to see a growing number of apps, such as those recently introduced by Shell and BP that allow customers to pay for fuel in advance, as well as a rollout of Wi-Fi and more electric charging points. Getting the forecourt mix right and offering a better experience will bring more customers who are likely to dwell longer and spend more.