The lure of a stable investment in the Covid climate is expected to lead to a fierce battle for two service station sites on Melbourne’s urban fringe on Tuesday.

Agent Burgess Rawson is selling the properties at 473 Maroondah Hwy, Lilydale and 1025 Frankston-Flinders Rd, Somerville through an online auction from 11am.

United Petroleum has a 12 year lease for both sites.

Sales executive Rick Jacobson said the agency had received strong interest from potential buyers for both sites as they offered strong, ongoing investment opportunities in a difficult environment.

“People want to find that investment to ride out this pandemic and something they can sit on for the medium term,” Mr Jacobson said.

“During Covid and any lockdown, they (service stations) are always going to be trading and you have that security with those assets.

“People are going to be throwing money at it considering how cheap it is to invest right now.”

He said the agency auctioned two other United servos on Lower Dandenong Rd in Braeside and Somerton Rd in Somerton earlier this year, both of which performed strongly and sold above reserve prices.

The Braeside service station sold for $4m and the Somerton service station sold for $3.85m.

United has signed on to be tenants at both sites until at least 2033 and the Lilydale site also includes a Pie Face bakery.

The new site owners for Somerville and Lilydale will benefit from annual, fixed compounding 2.5 per cent rental increases and planned infrastructure developments in each area.

The Somerville property generates $172,375 in annual rental income, while the Lilydale service station generates $218,650 per year.

The agency is auctioning the two service stations as part of a three-day event for various commercial sites around Australia, including Sunbury’s Ford dealership on Horne St.

Mr Jacobson said the vendors were reluctant to reveal their asking prices for the properties.

The Somerville site last sold in September 2010 for $720,000.

No sale history was available for the Lilydale address.

Extracted in full from: United Petrol: Lilydale, Somerville service station sites go to auction | Herald Sun

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