Sellers’ market in forecourt property: Christie & Co

This year is likely to remain a sellers’ market in the forecourt property sector with would-be purchasers outnumbering vendors, says Christie & Co.

The property advisory firm’s annual Business Outlook says the sector is “robust and driven by acquisitive buyers at all levels” with deal activity in 2024 continuing “in the same strong vein” as the second half of 2023.

Christie & Co’s retail price index – which reflects what businesses have been changing hands for – rose by 7.3% last year.

The firm says that by the third quarter of 2024 it had sold more sites than in the whole of the previous year, with a 47% increase over the 12 months in the number of exchanges, and an 118 increase in “new instructions”, effectively when a property goes on the market for the first time.

The report highlights some of the notable recent market activity, including MFG’s acquisition of 337 Morrisons forecourts for £2.5 billion and EG On The Move’s purchase of 34 former EG Group sites for £228 million. That was followed by the Zuber Issa-run start-up’s move to buy 100 sites from Irish operator Applegreen, announced earlier this month.

However, Christie & Co says forecourt operators have become “more selective” about what they are prepared to buy or develop and that, this year, “sites will only attract top pricing if they are large enough to accommodate future development or redevelopment of income-driving aspects”.

Its other predictions for 2025 include:

• · Rising staff costs as a result of measures in the Chancellor’s autumn Budget hitting the profitability of some forecourts, and leading to price rises.
• · Administrative “headaches” due to the introduction of the government’s Fuel Finder scheme.
• · Uncertainty over numbers of electric vehicles likely to replace their petrol and diesel counterparts on the roads.
• · A possible first quarter surge in properties for sale as vendors try to avoid rises in Capital Gains Tax or inheritance tax that come into effect in April.
• · Continuing divestment of sites by multiple retailers.

Commenting on the electric vehicle outlook, Steve Rodell, managing director of retail and leisure at Christie & Co, says petrol- and diesel-fuelled vehicles will “be around for many years to come”, but that retailers “must think long-term about investing in their sites”. He also describes as “intriguing” the question of how consolidation might play out after the EG On The Move Applegreen acquisition completes.