Demand for forecourt property is still strong according to Christie & Co’s retail team, which has published its Retail: 2022 Mid-Year Insight, providing an overview of the market in the first half of year and an outlook for the second half.
It reports that average diesel and petrol sales at most sites have recovered to 92% of pre-Covid levels, and historically high fuel margins and increased shop sales are supporting, and sometimes enhancing, profitability.
It also notes that while fuel was historically the primary reason to visit a forecourt, other income drivers have become increasingly important to improving site margins.
It states: “During the pandemic, the shop became the principal reason for customer visits and margins are far higher than fuel, so the drive to develop a full convenience offer particularly with “food to go” in any forecourt is very important.”
It also suggests this could become a long-term solution to any potential reduction in fuel sales resulting from the uptake of alternative fuelled vehicles. Other important profit centres it highlights are valeting and third-party rental income from complementary uses such as vehicle repairs or letting food and beverage units.
Although climate change and electric vehicles have captured news headlines it states: “The reality is that we are still a good many years away from a meaningful uptake of pure battery electric vehicles (BEVs), with M&A activity over the past 12 months underpinning the strength of demand for forecourt assets.”
However, it warns: “Retailers must ask themselves whether they are capable of being part of this future rapid charging network, and if not, they will need to make a big decision over the long-term future of their business. Either commit to diversifying towards non-fuel retail or consider exiting.
“So far, Christie & Co transactional data shows that the market growth for BEV’s has not impacted on the appetite for petrol station businesses, albeit the advent of BEV is not being ignored. Shell and BP have been introducing rapid and ultra-rapid charging points at selected sites for some time and other suppliers are likely to follow. National dealers are also responding, such as Motor Fuel Group which has plans to invest £400m into installing 2,800 ultra-rapid chargers at 500 locations by 2030.”
Steve Rodell, managing director – retail, commented: “Our collective experience during uncertain times means we are superbly placed to convey our market intelligence to the maximum benefit of business owners.
“Even if a sale is not currently under consideration, we can provide valuable guidance on how to navigate the challenges being faced by retailers right now. The pool of buyers remains active and while some players might be absent for now, there’s a queue of others ready, willing and able to make an investment in our robust sectors.”
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