Buyers snap up Queanbeyan service station

A service station in Queanbeyan smashed its reserve by $610,000 as 27 bidders battled to own a piece of petrol real estate that ticked all the key investment boxes.  

Anyone expecting a bargain was left on the sidelines at this month’s auction of the Caltex service station in Crawford Street in the city centre.

Selling agent Brett Barton, of Barton Molloy Property, says the property has salient investment features: a lease to a major fuel operator, a strategic location and sought-after price bracket.

“Auction rooms are always busy when this style of property is offered but even this one had a few firsts,” Barton says.

“We had 27 registered bidders and every single person who walked in the room registered and was bidding. There were no sticky beaks, everyone wanted that property and that’s a rarity.”

Bidding for the Woolworths-leased asset started at  $1 million with the hammer eventually coming down after 39 bids at $2.11 million: almost 30 per cent above the $1.5 million reserve.  

A mix of local and interstate buyers participated at the auction, which was eventually won by two local investors.

“About 50 per cent of the bidders were from Sydney and the rest were from Canberra, in the end a Canberra and Queanbeyan buyer duo took the keys,” Barton says.

While yields can be low relative to other commercial property assets, the hands-off nature of a petrol station leased by a major fuel operator and low-risk sweetens the deal, he says.

“In this price bracket, properties sell very quickly because there isn’t a lot of risk involved, particularly in this case with Woolworths as a long-term tenant.”

The retail giant has leased the service station since 2000.

A recent Knight Frank research report says petrol stations leased to major players will remain particularly popular because of a lack of buying opportunities for investors.

“With new market entrants aggressively seeking assets, investor demand will remain high, however restricted by the lack of available stock,” the report says.

“With increased interest for low value, defensive assets which offer long-term cash flow and a secure long-term tenant, average net yields in NSW, Queensland and Victoria have compressed.”

Earlier this year a Caltex service station in Murrumbateman was snapped up for $4.1 million by a Sydney-based investor.

The vendor, a local builder, previously operated the service station before selling the business to the current independent operator. He put the property on the market to take advantage of the strong retail climate.