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‘Investors are hungry for quality service stations’

By Grace Ormsby
24 March 2022 | 1 minute read
Deepen Khagram

Soaring fuel prices haven’t dampened investor interest in service stations, according to a Queensland-based agent.

Deepen Khagram, who operates under RE/MAX U, was reflecting on a 2021 sale of a Caltex service station in Toowoomba’s Ruthven Street.

Having undertaken an expression of interest campaign, Mr Khagram revealed he had attracted more than 50 genuine inquiries.

According to the agent, “investors are hungry for quality service stations in major regional centres, and in this instance, it was snapped up by a local buyer”.

He divulged: “Caltex Australia Petroleum was a solid tenant with 10-year lease and a two by five-year option and the site had desirable strategic corner access and high exposure to vehicular traffic along New England Highway.”

With the deal closing for $4.8 million, Mr Khagram highlighted that the sale realised a 5.4 per cent yield for the new owner.

This sale was preceded by an off-market sale of 7-Eleven Bracken Ridge, which had sold for $6.2 million – with annual rent commencing at $360,000 plus GST.

Describing that sale, the agent indicated the site was “approximately 11 kilometres north of the Brisbane Airport and 18 kilometres from Brisbane CBD, on a main road that carries more than 26,715 vehicles per day”.

Having himself bought and operated his own service stations over the years, Mr Khagram expressed that the service station sector remains “in very strong demand”.

It’s been a particularly successful period for the Queensland-based agent, who closes the 2022 first quarter strongly.

In the first three months of 2022, the commercial agent has successfully closed on a high-exposure development site on the corner of Uhlmann Road and Buckley Street, Burpengary; a transaction that had reportedly been under contract for approximately two years.

The tightly held 8,118-square metre (approx.) land parcel with multiple development options (STCA) sold for $2,180,000.

“This was a high exposure corner location at the entry point to North Harbor Estate, which drew significant inquiry from developers looking at multiple commercial development option,” Mr Khagram said.

“Its original purchasers have on sold their option to a large developer, the Lancini Property Group.”

In addition, the agent achieved the off-market sale of Edge Childcare Centre in Beaudesert – which sold prior to construction.

The secured tenant, Edge Early Learning, has a 15-year term with a two by 10-year option.

According to Mr Khagram, investors paid $4,636,000 for the property, with the sale realising a 5.5 per cent yield.

Like service stations, the agent sees childcare centres as a “safe and recession-proof asset class”.

 

‘Investors are hungry for quality service stations’
Deepen Khagram 2 lw
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ABOUT THE AUTHOR


Grace Ormsby

Grace Ormsby

Grace is a journalist across Momentum property and investment brands. Grace joined Momentum Media in 2018, bringing with her a Bachelor of Laws and a Bachelor of Communication (Journalism) from the University of Newcastle. She’s passionate about delivering easy to digest information and content relevant to her key audiences and stakeholders.

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