ASX-listed fund Elanor has carved off a corner site containing a 7-Eleven service station at its Waverley Gardens shopping centre, listing the property for sale as interest in the service station sector heats up.

The site, at the corner of Police Road and Hansworth Street in Mulgrave, in Melbourn’s south-eastern suburbs, is set to go under the hammer as part of Burgess Rawson Melbourne’s upcoming portfolio auction, with price expectations of between $5 million and $5.25 million.

Matt Healy, head of retail at Elanor Investors Group, said the fund had identified the current market conditions as the ideal time to divest a non-core asset.

“The sale of the 7-Eleven site service station at Waverley Gardens represents an opportunity for Elanor to divest of a non-core, ancillary site that is surplus to the functionality/operations of the existing shopping centre,” Mr Healy said.

“Further, the sale will leverage the current investor demand for well-located, metropolitan, food/convenience pad sites with long WALEs which are all the characteristics this strategic site possesses.”

The service station borders the Waverley Gardens shopping centre. Photo: Supplied

Along with co-investor, real estate investment management firm Heitman, Elanor purchased the Mulgrave shopping centre – which counts Woolworths, Aldi and Coles as anchor tenants – from Blackstone in 2018.

The 7-Eleven property had formed part of that acquisition but has now been carved off as a separate site.

The property is currently returning $252,919 a year in income, plus GST. There’s an 18-year lease to 2035, plus options to 2045.

Burgess Rawson director Raoul Holderhead said interest was expected to come from a pool of 56 underbidders who missed out on buying a service station at the firm’s previous portfolio auction.

As was the case then, bidders will be motivated by the classification of service stations as “essential services” during recent COVID-19-related lockdowns in Australia.

“As fuel is a non-discretionary purchase and a major component of the weekly budget essentials for Australians, the $31.4 billion industry remained relatively immune to the impact of COVID-19,” Mr Holderhead said.

There was a favourable lease structure which saw 7-Eleven pay all rates, building and public liability insurance for the 2150-square-metre site.

“The location is unbeatable, the lease is longer than standard, and the rent is highly affordable,” said Mr Holderhead.

The property will go under the hammer on Wednesday, December 9.

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