Top 50 Indie Highway Stops Retail has divested two of its sites to Essar under the energy company’s leasing package so that it can concentrate on developing its remaining portfolio of 14 forecourts mainly in the southeast of England.
The locations, at Spalding in Lincolnshire and Oakham in the East Midlands, which it originally bought in a parcel of five from MFG just over a year ago, were outside its main market and needed investment, according to retail consultant Ramsay MacDonald who brokered the deal.
The two sites are among 10 that Essar has acquired since announcing in February plans to expand by leasing hundreds of sites from forecourt operators who wanted to retain an income from their properties but no longer wished to operate them.
For Highway Stops Retail the deal, which will give it a monthly income from the two sites, will enable it to invest in its other forecourts.
“The sites that we are leasing to Essar are both decent businesses, and we have hit a sweet spot with them in terms of turnover, but we tend to operate largely in the southeast of England,” said Ramsay. “We are really keen to expand and are looking for more sites.”
The company had considered selling the freehold, but liked the ease of doing business with a large corporate which intends to retain the existing management. Additionally, under the commercial lease, it could opt out at any time and sell these forecourts as investment sites.
“The biggest attraction was having a high degree of confidence that the rent would be paid and the flexibility to choose whether and when to sell the forecourts as investment sites,” said Ramsay.
Highway Stops Retail is using part of the proceeds to update its other outlets. It has just carried out a refit of its Londis store in Gravesend. The refurbished outlet, which had a launch event today, includes a Fireaway pizza concession, a first for the forecourt industry, with a seating area, and the option for home delivery. The store has new chillers and shelving and a modern, exposed, black painted ceiling.
Meanwhile, a store expansion is on the way at is Park Royal outlet in London. There will be a three bay jet wash with contactless payment, to replace the existing single unit. Valeting upgrades will feature at other sites too, said Ramsay.
He says that Highway Stops Retail may consider transferring further sites to Essar. “However, Highway Stops primarily wants to grow, not sell off sites,” said Ramsay, who discloses that the company is focusing on an area south-east of a line from Birmingham to Southampton..
