petrol station cip
- Thread starter long88
- Start date
Petrol stations are considered 'specialised securities' because they can really only be used for one purpose - a petrol station. This limits the amount of potential tenants and thus they are considered riskier. It's harder to obtain finance for them which means that the yield is higher - which I'm guessing is why you're asking about them. There is also the very important point that Bob brings up about contamination - so it limits how much potential there could be from a rezoning or redevelopment of the petrol station site if that was to happen.
Some of the Woolworths pertol stations have been selling recently on cap rates of 5 & 6%.
Nothing to get too excited about.The cost of remidation of turning a petrol station back into something else later can be HUGE as others have said.....but it can be done and there are companies that specialise in this area.
my girlfriend is an enviro scientist working as a consultant. She has said in no uncertain terms never buy a petrol station or dry cleaners.
I agree. I've seen more that one site fail testing AFTER a small fortune was spent on the enviro cleanup. A very ugly outcome for an investor.
Some of the Woolworths pertol stations have been selling recently on cap rates of 5 & 6%.
Yikes that's an enormous cap rate...you might as well go buy a shop where a proper Woolworths supermarket is.
Nothing strikes more fear into a developer's heart than Fails EPA Audit. I've seen plenty of sites in Victoria where this has been a problem and those lots have remained unsold and empty for many, many years. Such a shame.
yep, 5% or 6%,
just saw one and expected price is 1.1 to 1.2, with return of 60k pa.
someone must be desperate ?
just saw one and expected price is 1.1 to 1.2, with return of 60k pa.
someone must be desperate ?
does "make good" clause doesnt incorporate any of the soils testing ? to make it good again as before the tenant moved in ?
Not much use if your servo operating under a heavy franchise earnings cents in the litre margin goes bankrupt. Make good clauses are good in theory, not so good in practice.
You'd think there'd be funders lining up for 10 year lease at 15%.
servo's
In the late 80,s I was part of a indicate that bought an old service station in inner city newcastle , with a view to build townhouses. It was straight forward back then , dig the old tanks out fill the holes and start to build. I'm sure now it would be a nightmare with the epa and could severely reduce other uses down the track. I did see a sale in the last month on burgess rawson site of a servo investment that also had a 1000m2 vacant block attached , sold on a yield of around 5.5 % i think. I would want a much higher return than that to take it on even though it had the land.
In the late 80,s I was part of a indicate that bought an old service station in inner city newcastle , with a view to build townhouses. It was straight forward back then , dig the old tanks out fill the holes and start to build. I'm sure now it would be a nightmare with the epa and could severely reduce other uses down the track. I did see a sale in the last month on burgess rawson site of a servo investment that also had a 1000m2 vacant block attached , sold on a yield of around 5.5 % i think. I would want a much higher return than that to take it on even though it had the land.
