Service Stations Not Under Threat From Electric Vehicles
During the pandemic, service stations were some of the strongest performing assets, with transactions up 50 per cent during 2022.
However, with governments continuing to push electric vehicle (EV) adoption, there are concerns that traditional service stations might become a thing of the past.
Ray White Commercial’s Head of Research Vanessa Rader said there was little evidence to demonstrate EVs were actually having an impact on values.
“With 3.4 per cent of new car sales to September 2022 being EVs (or hybrid) according to the Electric Vehicle Council, this represents a 65 per cent increase on 2021 results,” Ms Rader said.
“This highlights good growth, albeit Australia is continuing to lag behind much of the world.
“In addition, the slow delivery of vehicles, limited fast charging facilities, and overall rising cost of energy are yet another roadblock in the rapid rollout of these vehicles, which currently only account for an estimated 0.3 per cent of the total registered vehicles on Australian roads.”
Ms Rader said the expansion of many service station options to include food and beverage options also suited the requirements of EV ownership. Specifically, it helps answer the question of what to do during charging.
“With the most rapid charging still taking at least half an hour, the need for comfortable and enticing food, retail and entertainment options within service stations will grow, continuing the evolution of what these assets look like,” she said.
There has been an increased appetite for service station assets since 2011, Ms Rader said.
“In 2022 we recorded transactions of over $1 billion across Australia, up 52 per cent on last year’s result.
“There continues to be interest from experienced investors, developers, and private syndicates, who are looking to take advantage of the corrections in yields, as many first-time buyers, who were instrumental in lowering yields over the past few years, have now left the market.”
Ms Rader said sales volumes were likely to pick up further in 2023 with a correction in yields likely to cause some vendors to consider selling.