High values drive gas stations out of the city
Motorists could one day find themselves without any place to buy fuel downtown
Vancouver will likely lose more gas stations as land values soar and high-density zoning along major corridors in the city encourages more fuel companies to cash out, a commercial real estate expert says.
“Gas stations are typically located in prime areas on corners of major crossroads, and just the opportunity costs of capital that’s built within those sites, and how it’s been growing over the years — it makes sense to me,” said Curtis Scott, manager of market intelligence for Western Canada with Colliers International.
“I think it is a trend, for sure. But I think it depends on the organization that is managing the gas station,” he said. “From a real estate standpoint, you’re unlocking a lot of capital. It’s a unique opportunity.”
Earlier this month, Chevron Canada confirmed it would sell and close five more gas stations in Vancouver. Those stations are located at Cambie and West 16th, Oak and West 41st, Broadway and Alma, Cambie and West 59th, and West Fourth and MacDonald, as reported by the CBC and confirmed to Postmedia by Chevron Canada spokesman Adrien Byrne.
“Of those five stations, two have ceased operations, and the deals have completed,” he said in an interview.
“The other three are under offer, but we anticipate that offer to continue, and then we’ll be ceasing operations … over the next four to six weeks,” he said. “That’s what we anticipate.”
These sales follow Chevron’s previous divestment of its downtown station at 1698 West Georgia St., which has since closed after being purchased by Anthem Properties. B.C. Assessment valued that plot at $32.8 million, but media reports have said the deal was worth $72 million.
Vancouver now faces the prospect of having no gas stations in the downtown core. Esso’s station at Burrard and Davie streets has also been put up for sale.
A listing for the Esso site at 1205 Burrard St. by Colliers said the city’s West End plan allows for a 90-metre tower on the site, Postmedia reported in April.
The city said residents and visitors to Vancouver still have access to many gas stations in the city.
“There are several within one kilometre of the downtown core, which tourists could locate using online maps or satellite navigations systems,” a city spokeswoman wrote in an email.
She said the city has no plans at this time to put up notification signs for motorists entering downtown should the remaining gas station close.
Byrne said Chevron will still operate 17 retail stations in Vancouver following this round of closures. “We still have the largest market share in the city of any fuel provider,” he said.
He said skyrocketing land values in Vancouver make selling the land far more lucrative than selling fuel at those stations.
“While our primary business is obviously selling fuel, successful businesses as they are, it makes more sense for these particular properties to divest them for another purpose and redevelopment,” he said.
“If you look at Cambie and 16th for instance, down the street you can put in an eight-storey building and there is a lot of development in the corridor, so obviously those sites have value for other purposes, mixed-use or residential development …
“Our most valuable site was by far the West Georgia Street location, which we divested earlier this year.”
Scott said demographics are shifting, with higher-density developments moving into major corridors and along mass transit lines in the city, meaning mixeduse towers will likely go up on many former gas station sites.
Byrne said Chevron’s land sales remain unique to Vancouver for the time being, and despite the rise in land values across Metro Vancouver, they don’t plan to sell locations in other municipalities.
“That’s not something we’re considering,” he said.
While it seems more people in Vancouver are walking, cycling and taking transit, Byrne said it’s a myth that drivers are using less fuel.
“We only have a certain amount of volume that we can sell, and it’s based on what we can produce at our Burnaby refinery every day. But no, volumes have increased the last couple of years in the city despite a declining per capita share of car ownership. There’s still a lot more vehicles on the road,” he said.
In an email, Tourism Vancouver said their downtown visitor centre has not yet received any complaints from visitors about a lack of gas stations downtown.
“With that being said, most of the visitors who come into our Visitor Centre do so on foot,” Tourism Vancouver spokeswoman Amber Sessions said.
She said their data shows most business travellers visiting Vancouver don’t rent a car, and most leisure travellers book cars for trips outside of the city to places like Whistler or the Okanagan.
“Tourism Vancouver’s marketing generally reinforces the idea that you don’t need a car to visit the city,” she said, noting that GPS technology makes it much easier for drivers to locate service stations.
While our primary business is obviously selling fuel … it makes more sense for these particular properties to divest them.