Investor snaps up new Toowoomba servo for $5.8m

A newly-opened Toowoomba service station has been snapped up by a Brisbane investment syndicate for more than $5.8 million, in a sign of ongoing interest in essential businesses amid record-low interest rates.

The Freedom Fuels on the intersection of Alderley St and Anzac Ave was sold through Cushman and Wakefield late last year, producing a yield of about 6.3 per cent per annum.

The servo has an income of $363,000 per year and was leased until 2031, with options until 2046.

Lead agent Michael Collins said investors were still taking advantage of low interest rates to snap up properties that had benefited from the COVID-19 pandemic, such as childcare centres, service stations and fast food restaurants.

“That market is just exceptionally strong, due to the low interest rate environment,” he said.

“Instead of putting money in the bank, they’re going with businesses that have remained strong during COVID, like servos, fast food restaurants.

“What you’re doing is buying an income stream for the next 15 years, so that income is going to grow astronomically.

We’re seeing this trend continuing into 2021 and beyond.

“The Reserve Bank believes it will remain low for a long time, and that gives investors confidence to go out and buy.”

Extracted from The Chronicle

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