Self-funded retirees continue to snap up NSW 7-Elevens service stations, drawn by high yields

Self-funded retirees continue to snap up NSW 7-Elevens service stations, drawn by high yields
Larry SchlesingerDecember 8, 2020

Ten NSW 7-Eleven service stations have sold at auction, with the assets again proving popular with retirees with self-managed super funds due to their high rental yields. 

The 10 petrol stations sold in a price range from $2.2 million to $3.9 million, with yields ranging between 5.75% and 7.7% and an average yield of 6.81%.

A 2,335-square-metre petrol station on the Princess Highway in Dapto near Wollongong, which returns annual rent of $320,000, sold with the top rental yield for this tranche of 7.75%.


The first and second tranches of stores were auctioned in March and July last year and achieved average yields of 6.96%.  A third tranche was auctioned in November and achieved an average yield of 6.54%.

The full list of NSW services stations is:

Size

Annual rental

Yield

South Windsor, 735 George Street

47,370 sqms

$250,000

6.89%

Roseville, Cnr Pacific Highway & Boundary Street

2,598 sqms

$250,000

6.05% 

Bankstown, 180 Stacey Street

4,465 sqms

$320,000

7.33%  

Greenacre, 301-313 Hume Highway

8,268 sqms

$300,000

7.01% 

West Pennant Hills, 552 Pennant Hills Road

955 sqms

$160,000

7.10% 

Parramatta, 81 Victoria Road

2,802 sqms

$170,000

5.75% 

Dapto, 125 Princess Highway

2,335 sqms

$200,000

7.75%

Newport, 307-311 Barrenjoey Road

1,435 sqms

$250,000

7.01%

Burwood, Cnr Shaftsbury Road & Parramatta Road

4,549 sqms

$170,000

6.43%

Minchinbury, 815 Great Western Highway

2,419 sqms

$250,000

6.79%

The latest group of NSW properties was sold as part of a sale program kicked off by 7-Eleven following its acquisition of 295 service stations from Mobil Retail in May 2010.

Since acquiring the Mobil business, 7-Eleven has been converting the Mobil stores into 7-Eleven service stations with attached convenience stores.

All properties come with new 15-year leases to 7-Eleven with three further renewal options of five years each and 4% annual fixed rent increases. The tenant pays all outgoings except land tax.

“Over the past 12 months we have consistently achieved yields of between 6% and 7%, which is an indication of how stable these assets are,” says John Macree, NSW head of sales and investments at Jones Lang LaSalle.

Macree says retirees with self-managed super funds were again prominent buyers at what was a well-attended auction. 

At least one NSW service station was sold to an interstate buyer.

“Investors are seeing the importance of having solid long-term investments with a long-term stable income stream. That is particularly important for those planning for their retirement.” 

To date, Macree says about 80% of the buyers at 7-Eleven auctions have been self-funded retirees. 

“Of those, about half were investing through a self-managed super fund structure,” he says.

This is the second time in that past six months that 7-Eleven has achieved a 100% clearance rate at auction. The company sold 10 service stations in Sydney last November.



Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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