A series of sales worth a combined total of nearly $25 million have highlighted east coast buyer interest in Western Australia’s service station market, CBRE says.

The agency’s Western Australian Retail Investments team of Richard Cash and Anthony Del Borrello brokered five deals across the final quarter of 2019 at an average transaction size of $4.9 million and an average yield of 5.87 per cent.

The transactions meant the total sales volume for petrol stations in WA reached $69 million in 2019, up from $29 million in 2018.

Mr Cash said the increase reflected greater demand from investors, with the petrol station investment market welcoming a number of new buyers across the past 12 months.

WA service station sales in the fourth quarter of 2019. Source: CBRE

“In this low-interest rate environment, investors are increasingly looking for secure cashflow with long-term leases from strong covenants and additional depreciation benefits, which brand new petrol stations tend to offer," he said.

Mr Del Borrello added 80 per cent of investors were based on the east coast, from either Melbourne or Sydney.

“Recently, many east coast investors have been looking to Perth for relative value as they are being priced out of their own states," he said.

"For the same covenant and similar lease terms, east coast investors are able to purchase WA properties for a difference of 50-100 basis points in yield.

"We anticipate market demand to continue throughout 2020, with the Reserve Bank of Australia expected to further reduce the cash rate."

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