The pace of transition away from fossil fuels may be patchy at the moment, but Steve Rodell, managing director, retail, Christie & Co, believes there is an unstoppable momentum behind it.
He told the Forecourt Trader Summit 2023 that all the major political parties were committed to Net Zero by 2050 and issues around sustainability would have a growing impact on the forecourt sector.
He said banks were already seeking to reduce the energy emissions of companies they were lending to and owners needed to be aware of issues such as Energy Performance Certificates (EPCs).
He explained: “We can’t put anything on the market without an EPC and we also already deal with these in our valuation reports. We look at what the EPC rating is and if there are obvious things around the property that need to be approved we deduct a capital allowance off the value of the property to reflect that so there is already an impact on value as a result of having that in place.”
In addition, from April owners will not be allowed to sell or let a property on a new lease without an EPC with a rating of E or more. He added: “There are a lot of forecourts out there that do have an E rating, and that’s going to get tighter as we go forwards. From December 2025 it needs to be a C and that’s a tall order.” He said this meant owners should look at introducing energy saving measures such as LED lighting, lower energy refrigeration and possibly solar panels on the roof and electric chargers.
However, he pointed out that take up of electric vehicles was slow when the overall market was taken into consideration. There are around 33 million cars on the road but sales of new cars following the pandemic have been around 1.6 million and EVs currently account for about 14% of sales.
There is also uncertainty about whether hydrogen will play a part in the future, but Rodell said: “I do think there is a place for hydrogen. We did quite a lot of research into where things are at the minute and hydrogen power is 10 maybe 15 years behind where EV is at the moment but I think it is going to play an important part of the market as we move forward. There are cars and vans well into the testing phase so watch this space.”
Despite the uncertainty about the long-term transition of the fuel market Rodell said the market for forecourt property was still buoyant. The price index for forecourts was up 1.5% in 2022, which was a strong performance considering the wider economy, and there was still confidence in the prospects for 2023. He added: “We are still seeing multiple offers per site so there is still competitive tension, there are still buyers for every asset at the right price.”
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