Enormous growth potential

Published on: 11 September 2020

A 7-Eleven freehold investment with enormous growth potential has attracted much attention from the market as fuel and convenience retail continues to shine as one of the retail sector’s strongest asset classes.

The as-new service station at Altona in Melbourne’s industrial heartland features a near-new 7-Eleven, securely tenanted on a 15-year lease to Australia’s number one convenience retailer, and with additional options.

It will be auctioned at Burgess Rawson’s Portfolio Auction event at 11am AEST on Wednesday, September 23.

While the property draws a strong estimated net income of $310,638 per annum, it’s the potential to add further value that is expected drive interest from investors.

The 3631sqm property at 210-218 Maidstone Street includes an 814sqm pad site approved for a drive-thru restaurant or multiple retail premises, allowing the purchaser significant scope to immediately increase its offering.

Burgess Rawson director Billy Holderhead said properties leased to 7-Eleven were among the most in-demand nationally, as evidenced by the sale of almost $150 million of 7-Eleven-leased service stations across two auction events in late 2019 and early 2020.

“There’s huge demand for 7-Eleven properties, with an unsatisfied buyer pool of around $1.2 billion from our previous 7-Eleven Portfolio Auctions, and here you have a site with something extra to offer,” he said.

“The buyers looking at this asset are attracted to its ‘blue sky’. It is an ideal investment where the buyer can ‘set and forget’, while providing opportunities for their children to build a fast food outlet at the property in the future.”

The property offers a strong location in one of Melbourne’s most significant industrial and distribution hubs, with a number of major logistics operators in close proximity, a brand new business park next door, an approved 33,000sqm DHL distribution centre to be built just metres away and a potential 480,000sqm industrial estate within 500m.

It also benefits from annual compounding 3% rent increases and the $6.7 West Gate Tunnel project, which will halve times between Altona and Melbourne’s ports.

Holderhead said fuel and convenience retail remained one of the commercial property industry’s best-performed asset classes of 2020 and had continued to deliver strong returns throughout COVID-19.

“Fuel is one of the few industries that has been designated as essential services by the State Government,” said Mr Holderhead. “This has led to an increased focus as compared to February.

“It’s a great time to be getting into the essential services market, as this is where all the demand is.

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