“Petrol filling stations are still the ‘darlings’ of the property market with strong demand and therefore values on the up.”

Forecourt Trader speaks to industry experts, including our own Mark Frostick.

Mark Frostick, senior associate in the automotive and roadside team at Rapleys, comments, ‘in 2019 we saw some dealer group takeovers, but less of the really big deals that characterised the last few years. While most of the eye-catching mergers and acquisitions have probably happened, we expect to see some continued consolidation in the sector as the market rationalises in what is a highly competitive and challenging consumer market. At the same time, some of the larger independents have continued to expand overseas at least in part, perhaps, as a hedge against any negative impact Brexit might have in the future on the UK market.’

Frostick says the real challenge continues to be a lack of stock in the market. ‘The difficulties in unlocking new sites vary from location to location for example, a trunk road site in a rural area may have the highest potential value but can face complexities when it comes to planning. Meanwhile, urban sites can face more competition from a variety of alternative uses both residential and commercial with drive-thru restaurants likely to be the biggest competitor.

Forecourt site values have continued to hold up particularly due to the lack of stock and competition for sites and the market is interested in good performing sites at every level. Freehold demand is stronger than leasehold, but we continue to see issues, particularly at the lower level, where deals have failed to get over the line in an appropriate timescale as parties have struggled to keep up the pace and momentum to complete. With competition for sites high, it is paramount that operators are equipped to move swiftly and those who use professional advisers and solicitors with petrol station experience will always be better placed. At least partly as a consequence of limited property stock, we have seen operators looking at innovative ways to improve existing sites and fully utilise what space they have, for example by expanding upwards to create a multi-storey forecourt retail offering.

As for electric vehicles, Frostick says that while there continues to be much discussion about the long-term impact of electric vehicle infrastructure on the forecourt industry this is yet to fully translate into notable and widespread innovation on site. According to a recent government announcement, there are now more charging points than petrol stations but, for the most part, operators so far have been simply squeezing in charging points on existing sites where they can. “With the government now publishing league tables on electric infrastructure though and making new funding available for Local Authorities we may see the landscape begin to change, particularly as and when electric vehicles become more affordable and ubiquitous.’


The full article is available in print only from Forecourt Trader (01/01/2020).

 

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More Information: Automotive & Roadside