Service Station Business Valuation

Service stations are most commonly sold as freehold businesses and property when they are in non-metropolitan locations. Generally, the metropolitan service stations are owned by BP, Caltex, and Shell and are usually operated by Coles and Woolworths as tenants or profit sharers with or for the oil giants.

The supermarket chains have virtually taken over the industry and offer discount incentives thru consumer supermarket purchases rewards which can be realised by obtaining petrol discounts at Woolworths or Coles branded outlets. The independents find it hard to match this offer, although IGA supermarkets also have entered into cross-selling relationships with smaller petrol chains such as Gull Petroleum.

Country roadhouses or service stations are more often unattached to a supermarket and can either be a leasehold business or a freehold business, or a freehold business with accommodation attached.

The value of service stations is very much determined by the above factors, but as a general rule, a service station needs a medium to a large volume of petrol sales, large sales of groceries items, and good security of tenure, either by being a freehold or by having a long lease at a fair rental per annum.

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