Withers family offers 18 more 7-Eleven service station investments

EXCLUSIVE

The Withers family – which controls Australia’s 7-Eleven franchise – is offering another tranche of service stations via a sale and leaseback arrangement.

The 18 properties, in the Australian Capital Territory, New South Wales, Queensland and Victoria, will be offered separately at a live-streamed auction event starting in Sydney, then moving to Melbourne, on February 25.

All up, they are expected to yield about $70 million.

The listings come three months after the vendors banked $77.9 million offloading 15 7-Eleven leased outlets, also at a one-stop auction, which ran more than three hours.

At the time of listing those assets, the retailer announced that this second portfolio of service stations would be put to the market in 2020.

In 2014, another 15 7-Eleven freeholds were sold by the family for a total of $71.1 million.

In Australia, in the short term, 7-Eleven has flagged its intention to open about 30 new stores per year.

It has recently changed its strategies regarding owner-occupation – for its retail, but also offices (the company last September selling its long time 357 Ferntree Gully Road, Mount Waverley, headquarters to rent in Cremorne).

The Coomera service station is about 200 metres from Dreamworld.

Sales will unlock capital to open more stores: 7-Eleven plots growth path

The vendor is offering the 18 outlets with 12-year leases.

Burgess Rawson marketing agent Billy Holderhead said inquiry for the portfolio has been strong since October’s sell-down – before investors would have even known the site locations.

“A lot of the successful buyers, along with those who missed out, have been chasing us an asking ‘Will there be more?’” the agent said.

“Investors who bought last time still have capacity and those who missed out are still very much in the market”.

Colleague Jamie Perlinger said 7-Eleven is distinguished somewhat from other service station brands, having a high number of customers who visit but don’t buy petrol.

The broker added the Australian business arm has also been “evolving” in recent years with new products and services.

“7-Eleven is expanding by about 30 stores per year and would like to accelerate that growth through the sale of existing assets,” Mr Perlinger said. “They have ambitious growth goals and holding these properties is not going to help them achieve their ambitions”.

The February 25 auction event will begin at Auctionworks in Sydney then switch to Melbourne’s Crown Casino.

The sell down will be live-streamed across all of the agency’s Australian offices and bidding auditoriums, the brokers said.

Extraordinary period for service station listings

On December 12, Charter Hall announced it paid BP Australia $840 million for a 49 per cent stake in 225 national convenience store investments.

This portfolio includes the majority of BP’s service station stock.

A week earlier, 25 service stations, trading as Caltex’s but controlled by a company which has since re-branded as Ampol, were sold down individually, as development sites, reaping $136 million (or $92 million after the vendor’s remediation costs).

Another tranche of Ampol occupied properties are expected to hit the market, again targeting builders, this year.

In November, 2018, Ampol sold two suburban Melbourne service stations, as investments, for a total of $7.8 million.

Last month, Chevron announced its intention to return to the local petrol sector after four years, paying $288 million for Puma Energy.

Puma Energy owns more than 270 service stations, 20 depots and three seaboard terminals, across Australia.

Shortly after announcing the Puma Energy deal, Chevron seized control of the Caltex name it rented out here, causing the Ampol re-brand, which will be fully rolled out over the next three years.

The latest 7-Eleven portfolio

“Headlining the offering is the 7-Eleven at Wahroonga on Sydney’s upper north shore,” the marketing agents said. “Located on the six lane Pacific Highway and positioned at the gateway to one of Sydney’s most tightly held retail strips, the property is close to the train station and prestigious local schools”

Some 60,000 vehicles pass the site daily, the agents added.

Elsewhere in New South Wales, service stations in Mayfield West, Maryville, Plumpton, Minchinbury, and South Penrith, are for sale.

“In Victoria, a well-known 7-Eleven site on Bell Street, Pascoe Vale South, is certain to prove popular,” Mr Perlinger said. “The property is the last fuel site before the Tullamarine Freeway featuring a strategic 1866 square metre site and leased for $215,000 per annum”.

“Another 7-Eleven integrated with Corio Village Shopping Centre in the booming Geelong region is expected to be one of the most attractive Victorian asset for investors, with an annual rent just over $160,000,” the broker said. “The 7-Eleven occupies a prime 2360sqm landholding adjoining Corio Village, which was recently sold for $101 million”.

Pascoe Vale, Upwey and Wantirna round out the outlets available in the southern state.

In the ACT, 7-Eleven service stations at Giralang, Melba, Mawson, Spence and Wanniassa – the latter near Erindale Shopping Centre which has just undergone a $39 million renovation – are on offer.

In Queensland, the 7-Eleven Coomera, 200 metres from the Gold Coast’s Dreamworld theme park, as well as in Nambour are up for grabs.

7-Eleven in Australia

Businessman Russell Withers and his late sister Beverley Barlow opened Australia’s first 7-Eleven outlet in Melbourne’s Oakleigh, in 1977.

Following the resignation of Mr Withers from the board in 2015, the company is now led by Ms Barlow’s son, Chris.

Under its previous management the company sought to owner occupy its stores.

In 2010, 7-Eleven acquired about 300 petrol outlets from ExxonMobil.

In 2014, the Barlow family acquired the rights to market Starbucks in Australia.

The 7-Eleven Upwey outlet, in Melbourne’s outer east.
The 7-Eleven in regional Victorian Geelong.

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Marc Pallisco

A former property analyst and journalist, Marc is the publisher of realestatesource.com.au.

Marc Pallisco