Expected disposals of forecourt sites by the top independents have not materialised, but are still expected, according to an overview by Christie & Co of the UK convenience and petrol filling station markets in the first half of 2018.
The biggest event so far during 2018 has been the acquisition of the largest independent operator, MRH, by the second largest independent operator, Motor Fuel Group’s (MFG), in a £1.2bn deal. This has meant both companies have been unable to participate in the market due to CMA (Competition and Markets Authority) rules.
The report notes: “While this may have taken some froth out of the market, the retail team at Christie & Co continues to experience other highly acquisitive group operators in both the convenience and petrol filling station markets.”
At the beginning of the year it was predicted that top independents would focus on growth in the short term, favouring selective single acquisitions where sites were better than those already owned, leading to a potential real estate churn.
However, Christie & Co reports that while there have been continued single site acquisitions by group operators in the petrol filling station market, the anticipated real estate churn has yet to commence, but expectations are still high that this is on the horizon.
There was also an expectation that the major grocers would continue to expand into the petrol filling station market through franchises or supply deals. This was the case in 2017 with tie-ups between Sainsbury’s and Euro Garages, and the Co-op working with MRH. However, the report notes that these partnerships have had mixed results and further moves seem to have withered away.
In a busy start to the year, Christie & Co handled notable deals across the UK including: the sale of Bathway Service Station in Bristol on behalf of Flying Visit to BP for conversion to an M&S Food site; Warren Wood Service Station in Buckhurst Hill which was purchased by Rontec; and Dunswell Service Station in Hull which was sold to The Sewell Group.
Christie & Co will release its 2019 Business Outlook, presenting an annual overview and year ahead forecast in January 2019.