Retailers capitalise on demand for convenience stores at fuel outlets
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 email@example.com.
OPPORTUNITY: This Hemel Hempstead, London, property is considered to be a sound commercial investment opportunity.