Re­tail­ers cap­i­talise on de­mand for con­ve­nience stores at fuel out­lets

Weekend Argus (Saturday Edition) - - PROPERTY -

SOUTH Africa is fol­low­ing a grow­ing in­ter­na­tional re­tail trend, notably suc­cess­ful in the UK, to­wards con­ve­nience stores at fuel out­lets, says Marco Ra­paglia, a di­rec­tor of Athanor In­ter­na­tional Prop­erty In­vest­ments.

Athanor has offices in Lon­don and Cape Town with rep­re­sen­ta­tives in re­gions around South Africa. In joint ven­tures with Pam Gold­ing Prop­er­ties, Athanor fa­cil­i­tates UK prop­erty in­vest­ment op­por­tu­ni­ties for SA and for­eign in­vestors.

Ra­paglia says lead­ing re­tail­ers such as Wool­worths and Pick n Pay are reap­ing the ben­e­fits of this trend with con­ve­nience stores on the fore­courts of fuel out­lets, cap­i­tal­is­ing on cus­tomers’ grow­ing de­mand for on­estop fuel and food venues.

“In the UK, com­pa­nies like Tesco Ex­press, Marks and Spencer Sim­ply Food, Sains­bury’s Lo­cal, Somer­field Es­sen­tials and the Co-op­er­a­tive So­ci­eties all com­pete in this emerg­ing mar­ket, which is set to dom­i­nate con­ve­nience food sales in the fu­ture,” he says.

Ac­cord­ing to in­ter­na­tional food and gro­cery ex­pert, IGD, and William Reed Busi­ness Me­dia, the UK con­ve­nience store mar­ket is now worth around £29.1 bil­lion (about R341.7bn) a year.

“There are about 8 640 fore­court con­ve­nience stores in the UK,” says Ra­paglia. “The fore­court con­ve­nience mar­ket in the UK is ex­pected to ex­ceed growth in the buoy­ant con­ve­nience store mar­ket, with sales ex­pected to es­ca­late by some five per­cent a year com­pared with the over­all con­ve­nience store growth of four per­cent,” he said.

“This means de­mand for well sit­u­ated sites is ex­pected to in­crease, prompt­ing Athanor to ac­quire one of 85 fore­court con­ve­nience stores/mini su­per­mar­kets and petrol fill­ing sta­tions op­er­ated by Somer­field Stores Co-op­er­a­tive Group.

“This prop­erty is in a prom­i­nent po­si­tion on Red­bourn Road, a ma­jor road in Hemel Hemp­stead which forms part of the Lon­don com­muter belt and serves res­i­den­tial and in­dus­trial ar­eas. It has a busy fore­court and all fuel sales must be paid for in the store which is stocked with a di­verse range of goods, and with am­ple park­ing for non-fuel buy­ers.

“The prop­erty has a strong ten­ant on a long lease – with 18 years re­main­ing, and has been ac­quired at an at­trac­tive yield which cap­i­talises on cur­rent mar­ket con­di­tions and pro­vides the po­ten­tial for mak­ing an an­nual cash pay­ment to in­vestors.

“Re­turns are pro­jected to ex­ceed 50 per­cent over five years, or 10 per­cent a year (8.45 per­cent com­pounded),” Ra­paglia says.

For more in­for­ma­tion call Arnold Ur­son of Athanor at 021 417 7878 or e-mail arnold@athanor.co.za.

OP­POR­TU­NITY: This Hemel Hemp­stead, Lon­don, prop­erty is con­sid­ered to be a sound com­mer­cial in­vest­ment op­por­tu­nity.

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