Cadence Property Group has sold a 7-Eleven petrol station off-the-plan for $5.41 million as service stations and convenience stores with long leases continue to attract small investors.

JLL’s director of retail investments Stuart Taylor said the service station in Cadence’s Maidstone Business Park sold with a pre-lease in place to 7-Eleven Stores for an initial lease term of 15 years with a design and construct agreement in place.

“In effect, the buyer purchased the service station investment off-the-plan,” he said.

The 7-Eleven, to be completed this year, sold on a yield of 5.3 per cent.

Private investors and self managed super funds were attracted by the lease covenants, fixed rental reviews and long initial lease terms these sort of properties offered, he said.

Another investor paid $4.275 million, on a 5.3 per cent yield, at auction for a 7-Eleven petrol station at 581 Springvale Road in Springvale South.

Teska Carson’s Matthew Feld and Michael Ludski said the property sold with an 11-year lease at current net annual rental of $230,000.

The petrol station market has seen significant yield compression over the past two years, with yields as low as 2 per cent for prime inner-city locations.

Late last year,  JLL brokered two sales for the Withers Barlow Property Trust selling 7-Eleven assets in St Kilda and Box Hill for $10.2 million and $8 million on low yields of 2.73 per cent and 2.14 per cent respectively.

 Extracted from Sydney Morning Herald.