Property prices in the convenience retail sector grew at 10.3% in 2015 with growth predicted to continue in the medium term, although the pub conversion trend has tailed off, according to Christie & Co.
Last year was characterised by continued c-store acquisitions by the multiples, but also a strong resurgence of independents acquiring lower tier sites, the property specialist’s Business Outlook 2016 report reveals.
Around 70% of all forecourt sites are now independently owned compared to 60% just five years ago, as oil companies sold a number of sites to independents such as Euro Garages and Motor Fuel Group.
But only 3% of pubs sold by Christie & Co were for conversion to c-stores, while 84% of freehold pubs sold were retained for their original purpose.
Christie & Co managing director for retail, Steve Rodell, said it was a good time for independent retailers to enter the market, given the low interest rates and an improved lending market.
“On a macro level the best return on investment is outside London and the South East, although that is where more people are inclined to shop in c-stores,” he told C-Store.
“On a micro scale I’d recommend looking for somewhere with not much competition within a mile, high footfall and a residential area. It all depends on location.”
He added: “2016 will see the convenience property market grow concurrently with real estate generally and we expect a busy year with more M&A activity possibly through private equity participation.”
The report warned that the National Living Wage and potential changes to the Sunday trading law could impact the sector in the coming year. In addition, the devolution of the administration of business rates to local authorities could result in less occupier demand in areas of high rates and an increase in demand in cheaper areas.