Penshurst BP service station sells under the hammer for $2.6 million

A BP service station and convenience store in Penshurst has sold under the hammer for $2.6 million.

The self-serve service station on a 1106 square metre site at 494 Forest Road was leased by a BP franchise.

The building measured 221 square metres.

The property was marketed and sold by Ray White Commercial NSW Director Michael Ajaka and Ray White Hurstville Sales Manager Christopher Munk.

Ajaka said the auction was attended by a 50-strong in-room crowd.

“The bidding started at $1.6M and more than 35 bids later, the sought-after asset finally sold for $2.6 million, $1 million more than the opening bid,” Ajaka said.

“Two multi-site service operators looking to add the property to their individual portfolios were raising their paddles, with a local Chinese syndicate and offshore buyer also bidding, until a local identity placed the winning bid.

“The sale represented a yield of five per cent net and highlighted how service stations are a solid investment in the current market. 

“It’s the only service station to be sold in the St George area in at least five years, with me selling the previous one.

Munk said the property benefited from a high volume of nearby traffic flow.

“The property is leased to the BP operator until September 2020 with 2x4-year options taking you all the way up to 2028,” Munk said.

“The asset produces $127,202 net rent per annum, plus GST, and has fixed three per cent increases.

“There were over 67 genuine enquiries for the asset, and they're still contacting Michael and I, wanting service stations.”