Whilst there is probably no such thing as a recession proof property class, the Manager has suggested, in its opinion pieces, that the softening of capitalisation rates due to inflationary pressures may well have less impact on service station and convenience store assets held by the Fund, than many other property classes. This, we have argued, is due to the asset having certain features:

•  the assets generally are more “bite sized” – with potential values of $5m-$10m, providing a broad market amongst rich-listers, self-managed super funds and professional investors;
• all tenants being ‘A’ grade and household names, providing investor confidence in long term income flows;
• lengthy leases (average WALE over 10 years)
• attractive lease recoveries of on-costs, reducing any potential costs burden;
• highly and professionally maintained properties, largely at tenant’s cost;
• sound location and first-class access to sites assist the value add and flexibility, if alternate uses are sought;

The Manager has seen that prices for quality assets have, to some extent, resisted tightening cap rate movements, and there are encouraging signs that inflationary pressures may now have peaked. On the following sections are two recent AFR articles.

Our tenants include:

• 7-11, (6 sites)
• United Energy, (2 sites)
• Ampol, (1 site)
• Hungry Jack’s, (1 site)
• Red Rooster, (2 sites)
• Starbucks, (2 sites)
  amongst others.

AFR: Rich Listers cash in on appetite for recession-proof retail assets

Source : Rich Listers cash in on appetite for recession-proof retail assets (afr.com)

AFR: Mum and dad investors quit housing for fast food and petrol stations

Source : Investors target fast food, petrol stations amid housing downturn (afr.com)

To find out more about the Banner Service Station and Convenience Store Property Fund click here or contact enquiries@bannerassetmanagement.com