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Market Insights

23.07.2019

Demand for Service Station Investments Tipped to Drive Interest in Baldivis Sale

A Melbourne based private developer is offering the new Puma service station in Baldivis for sale in a national campaign with the CBRE Retail Investments team.

Located at the corner of Ridge Boulevard and Nairn Drive, the service station opened for trading in early July to service the growing residential area of Baldivis, south of Perth.

The sole tenant is international fuel and convenience retailer Puma Energy, one of the biggest fuel retailers in the world with a network of 2,500 outlets globally and more than 270 across Australia.

The CBRE Retail Investments team of Joseph Du Rieu, Richard Cash and Anthony Del Borrello will steer the national sale campaign.

Mr Du Rieu noted that the offering coincided with a surge of interest in quality freestanding retail investments since the May Federal election.

“While the market seemed to take a breath during the weeks surrounding the election, buyer interest has again been piqued off the back of the two recent rate cuts from the RBA and the ever low cost of debt for passive investors,” Mr Du Rieu said.

Recent CBRE campaigns for fuel anchored investments in Western Australia include the Shell in Orana and 7-Eleven in Mandurah, both of which attracted interest from multiple bidders.

“We are anticipating a strong level of demand for the Puma offering both from local Perth-based investors and east coast buyers looking to minimise their exposure to state land tax in Victoria and New South Wales,” Mr Cash said.

“This will be underpinned by the very secure, 15-year initial lease term and by the fact that many private investors view new service stations as a stepping stone into the retail investment market.”

Mr Du Rieu attributed the interest in service station investments to the much higher barriers to entry for investors seeking to acquire other retail assets such as freestanding supermarkets.

“To buy a new supermarket leased to Coles or Woolworths, investors would generally have to spend $20,000,000 or more, whereas a service station investment such as Puma Baldivis can be acquired at a much lower price point, while offeing excellent depreciation benefits and a long term lease to a very strong international tenant,” Mr Du Rieu said.

Expressions of Interest in the Baldivis offering close August 29, 2019.

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