Konfir Kabo banks $6 million-plus selling Gisborne service station after three hours

Three hours was what it took to seal a $6 million-plus deal for a service station in Melbourne’s north-west Gisborne.

Property investor, lawyer Konfir Kabo, offered 23 Robertson Street in mid February.

Quinn Reynolds’ Marcus Quinn and Lincoln Reynolds, with Appel Property’s Ben Appel as transaction manager, closed a deadline private sale campaign last Friday.

All declined to comment about the vendor but of the campaign, said the result translates to a c5.5 per cent yield.

The asset formed part of a portfolio of 17 which Mr Kobo listed in 2017, then withdrew, to sell some down separately. The vendor also holds a number of restaurant investments.

The corner site (centre) has 83 metres of street frontage and three crossovers.

Investment attributes: 23 Robertson Street, Gisborne

The four year old Gisborne facility is leased to Puma – a global energy brand controlled by Chevron – which recently replaced some 360 former Australian Caltex-branded stores.

The operator is on a 15-year lease with rental rises and four five year (renewal) options.

Following a 3.5 per cent increase to take effect in May it will collect $359,873 for the year.

The 1498 square metre Commercial 1 zoned block is at the south west corner of Prince Street, giving it 83 metres of road frontage. It has three crossovers.

Next door are investments occupied by a McDonald’s restaurant, Chemist Warehouse, Bakers Delight, Ferguson Plarre Bakehouse and IGA supermarket.

Former town, now considered outer metropolitan Melbourne

About 50 kilometres from the city, abutting Sunbury to the north west, Gisborne is a gateway to Macedon Ranges.

Decades ago both suburbs were classified semi-regional locations. Nowadays they are considered to form part of outer metropolitan Melbourne.

Mr Quinn said 23 Robertson Street sits within the centre of the Gisborne township in a location well known to locals and tourists.

“The suburb is a major contributor to the Macedon Ranges economy and tourist region and also represents a large portion of the main trade catchment of nearby Sunbury, estimated to encompass well over 100,000”.

In May, 2018, ID_Land paid about $61 million for a 75 hectare block at 39 Willowbank Road, Gisborne, now earmarked for a 600-lot housing estate.

Late last year Samuel Property paid Carlton Football Club president Mark LoGuidice $6.15 million for Gisborne Square, a corner retail investment with 10 tenancies and a rooftop car park with development upside.

This sale price – well over the $5.5 million guide – translated to a 5.4 per cent yield.

Service stations in the news since last quarter

Mr Appel said that in 4Q 2019, the majority of petrol stations offered for sale formed part of a large portfolio.

This included 25 properties offloaded by Caltex – which traded for a total of $136 million or $92 mediation after its remediation costs – to five separate buyers including Woolworths, which snapped up 10.

The Withers family, owner of 7-Eleven’s Australian franchise, banked $77.9 million selling 15 petrol stations last October (and, last month, $78.2 million from another tranche of 18).

In December, following an off-market campaign, Charter Hall paid BP $840 million for a 49 per cent stake of a national portfolio of 225 investments on a leaseback – and was later reportedly seeking to raise capital to snap up more.

“These large-scale transactions have a left a major gap in the market, with very few prime ‘individual’ petrol stations investments being marketed anywhere in Australia,” Mr Appel said when 23 Robertson Road was listed.

“There is tremendous focus on this asset class from all corners of the country at the moment, and the rise of electric vehicles has in no way diminished the appeal of petrol station investments, which have long leases and outstanding future redevelopment prospects, especially as their sites are nearly always chosen for their distinct prime retail characteristics like exposure, passing traffic and premium zonings.

“Even in Western Australia, where yields are historically much higher than on the east coast, yields for petrol station investments have now dropped to as low as around 4.25-5 per cent, highlighting strong investor interest at a national level and signalling a chase for safe, passive long-leased assets in sectors that have recession-proof characteristics, like fuel and convenience or healthcare” Mr Appel added.

The four year old service station sits between an IGA and McDonalds restaurant.
The site (marked) is a block from shopping centre Gisborne Central and Gisborne Aquatic Centre.

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Marc Pallisco

A freelance property analyst and journalist, Marc is a co-founder of realestatesource.com.au.

Marc Pallisco