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Service stations primed to profit off green energy transition

By Orana Durney-Benson
09 November 2023 | 12 minute read
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As Australia hurtles towards net zero emissions, these community hubs could be the dark horse of commercial real estate.

The climate transition is sometimes painted as a threat to established businesses, but a new CBRE report revealed that some of the country’s most carbon-heavy local institutions could have a bright new future.

In recent years, service stations have emerged as an alternative in the commercial real estate sector, and CBRE argued that these facilities are “well-positioned to capitalise on Australia’s ongoing energy transition”.

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As service station operators transition from fossil fuel filling stations to electric vehicle (EV) charging hubs – and potentially hydrogen storage for long-distance trucking – new retail opportunities could be unlocked.

CBRE capital markets manager and automotive specialist, Lee Holdsworth, explained: “Given expectations that customers will remain connected to a charging station for an average of 15 minutes per use, convenience and retail has emerged as a major focus for service station operators.”

“The shift has resulted in the evolution of the traditional service station from being a place of refuel, to becoming a one-stop shop for customers, offering a broad range of food, retail and convenience,” stated Mr Holdsworth.

Service stations aren’t the only area that the report identified as being ripe for eco-investment. In total, CBRE forecast that the race to net zero will have the potential to create $62 billion worth of commercial real estate opportunities in the next seven years.

For Australia to meet its goal of cutting emissions 43 per cent from 2005 levels, CBRE calculated that the nation would require over $1.2 trillion of additional investment. By 2060, they forecast a total capital commitment of $9 trillion, and 120,000 square kilometres of land.

As CBRE research analyst Cameron Douglas-Perrine highlighted, this offers a substantial opportunity for the real estate sector.

“If the commercial real estate industry can capture a conservative 5 per cent of this evolving industry and its anticipated investment, through the sale, leasing and development of renewable assets, this would represent a $62 billion opportunity just in the lead up to 2030,” said Mr Douglas-Perrine.

As well as converting service stations to EV charging facilities, the firm predicted that local farming families will benefit from agricultural land being used for wind and solar power, energy transmission, hydrogen and battery storage capabilities, and heat pumps.

CBRE prophesied that carbon-neutral infrastructure will represent “one of Australia’s most rapidly growing and significant investment markets over the next two decades”.

“Companies have a role to play in climate change and are therefore seeking opportunities that not only have a positive contribution to society, but also have a financial benefit for shareholders,” Mr Holdsworth concluded.

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