Forecourt firms are well versed in optimising shop and fuel sales, but sometimes a rarer event – the sale of a forecourt itself – is called for, and operators face selling a very different product to a very different market.
Just as those in the industry like to learn from one another when it comes to increasing revenue in store and at pump, so too can industry insiders help when it comes to getting a good deal when the forecourt itself is up for sale – both in terms of making the transaction itself as straightforward as possible, and getting the best price.
Clearly it’s not a wise idea to put serious money into a site you won’t be owning for much longer, so while a new shop fascia and flooring might make a good first impression, as well as not seeing a return on such investments, any subsequent owner may decide to rip out such features, consigning your cash to a skip.
Tanks and tests
Jack Aplin, group sales director with Eurotank, says getting the integrity of fuel tanks and lines tested is something vendors could consider, explaining: “We do get requests from people looking to buy a site who ask us to go in to test everything before they buy it. That can be a bit tricky because it’s not their site yet, you’re testing the old owner’s site.”
Aplin adds that such a test typically involves pump downtime and can take a day or two, but if a vendor gets the inspection done themselves, this can save one or possibly more potential buyers asking for their own survey, and also assuages any concerns that a vendor who asks for a test might not be totally committed to purchasing, and could be wasting the seller’s time.
There is also the question of what happens if the test reveals issues, he says. “If something fails on the test, or something gets broken – because these can be 30-year-old tanks – then it becomes a bit difficult for everyone involved. But if the seller has commissioned a tank and line test themselves, and everything has passed, the buyer is going to feel a lot more comfortable.”
The good news is that a tank-and-line test shouldn’t cost the earth: “You can probably get a whole site done for under £2,000, so it’s not mega money,” he says.
Vendors should also get all their maintenance paperwork in order, as Aplin explains. “If sites can show they’ve had their Stage 1 vapour recovery inspections done every year, their interceptor services done every year, and the seller can present a folder with maintenance paperwork for the last five years, a buyer will be thinking they’ve obviously looked after the site.
He adds: “But if there’s nothing there, they might think you’ll have a lot of work to do when they take the site over.”
Know your site’s quirks
Mark Frostick, associate director in automotive and roadside at property firm Rapleys, says demand is still outstripping supply in the sector, so while moving a forecourt on shouldn’t ultimately be difficult, “there are a few matters that can help speed up the process without having to look at completely redeveloping your site”. To illustrate this, he says that Rapleys has recently had a couple of deals where exchange took place “within weeks rather than months”.
Frostick explains that while “minor repairs are unlikely to put parties off”, vendors looking to move a property on should bear in mind how powerful a sense of smell is, explaining that his firm has “visited sites where there have been issues with the drainage or other smells”, something that can “paint a site in a bad light”.
Speaking of drainage, how watertight a forecourt’s canopy and shop are shouldn’t be overlooked, either. “If a party turns up to inspect on a rainy day and there is pooling of water on site or gutters leaking water these can certainly put parties off,” he adds.
With “a few exceptions”, properties over 538 sq ft must have an Energy Performance Certificate (EPC) before they can be put on the market, and while this will be part and parcel of the early sales process, Mark reminds vendors to bear in mind that if their site sits in the two lowest F and G bands, they’re “legally required to bring it up to at least an E grade before the lease can complete”, potentially requiring maintenance that could delay any sale.
Spring cleaning
Getting back down to the nitty gritty, Cheryl Aston, marketing coordinator with forecourt equipment and services firm TSG Solutions, emphasises that “first impressions matter” when it comes to selling, and that “brightly lit, up-to-date and clean signage” can make a big impact.
“Regularly cleaning signs to remove dirt and grime ensures they remain readable and visually pleasing,” Aston adds, advising that switching to LED lighting is also a relatively easy win. This can both help improve a site’s EPC rating and make customers feel safer, “which is a selling point for potential buyers”.
Aston advises that “forecourt canopies and fascia panels are often overlooked”, while “dirt and cobwebs can gather on the canopy lighting”, leading to a “dull and uninviting” environment, “especially if a few burnt-out bulbs need replacement”, she adds.
Given the hard-to-reach nature of canopies the solution here may well involve a “team of professional cleaners with experience in the petrochemical industry” such as those deployed by TSG, and while this will obviously come at a cost, it should be a relatively palatable one that helps make a site “more attractive and saleable”.
Sellers should also be sure to pay attention to the forecourt itself, fixing any defects in a site’s hardstanding. “A smooth, well-maintained surface looks more professional and enhances the overall image of the forecourt,” Aston explains. “Simple landscaping improvements, such as adding low-maintenance plants, trimming hedges and ensuring the grass is well kept” can also “boost the overall impression” of a site, she adds.
Just as when selling a home, general site cleanliness shouldn’t be overlooked either, as “a clean and organised site is more attractive to potential investors”. And, just as Mark Frostick advises vendors pay attention to nasty smells, Cheryl says that a grotty bathroom is sure to stick in potential buyers’ minds. Here, she suggests “minor upgrades, including new fixtures, improved lighting and a fresh coat of paint”.
