07/09/2026
ValuationsPetrol filling stations come in all shapes and sizes - and uses well beyond fuel, says Mark Searby, one of BTG Eddisons’ trading valuations directors. However, first principles remain when it comes to making a business valuation.
We can be asked for a trading valuation of petrol filling stations by a number of parties and for a number of reasons. Perhaps it’s for the lender when an applicant is looking for re-financing for improvements, or for an operator for heads of terms lease purposes or an incumbent tenant looking to take-up purchase of the freehold.
While open market transactions of these types of commercial assets are less frequent than in other more mainstream commercial property sectors, when they do arise our specialist trading valuation team will assist potential lenders.
Trading valuations can be commissioned on a petrol filling station as a going concern or a property only basis or an assessment of both aspects.
When undertaking a valuation of a petrol filling station as a going concern, a full review of the associated financial information is required. Where we are undertaking a property only valuation of just the land and buildings, to give a true value, a full assessment of the financial performance of the site and wider operations is valid.
During the past decade the retail element of petrol filling stations has played an ever increasing role in contributing to the business’s performance. Even as fuel prices have risen so steeply during this time, the business operator’s profit element on the fuel itself is marginal - which may seem counter intuitive to the average motorist, admittedly.
Not sure which valuation basis applies to your assets?
Our team advises on the most appropriate methodology for every asset category. Email [email protected] to discuss your specific requirements.
The retail potential of a site - whether it be of a corner-shop style configuration or the more extensive multiple-retail operations on key trunk roads or even the boutique farm shop feel of the ‘glamour-stops’ on our motorway network - may materially affect both the going concern value and the underlying commercial property value. Some such stops are destinations in themselves and have a significant hospitality/leisure attraction element that has nothing to do with fuel-filling purposes.
Other factors beyond a mainstream retail offer also come in to play. For example, the presence of ATM cashpoints or car wash facilities - whether manned or automatic. Newer factors appearing are on-forecourt automatic launderette facilities and the presence of courier parcel collections points.
Most commonly, either a full profits method or residual profits method valuation is undertaken when it comes to working to a potential lender’s instruction. This provides the lender with a going concern or a property only value which can then be crosschecked with comparable sites, both in the region and also a national, notional measure.
While a going concern valuation is relatively straightforward, a residual profits approach - utilised to assess the property only value of a site - acknowledges the value of the site on a going concern basis before adjusting for how long it might take, and with what level of capital expenditure, a new occupier to get to the level where the current operator is trading presently.
Assessments of market rents are also undertaken which have to assume the property was leased on the open market - with the caveat about how uncommon such opportunities are, there is limited comparable data, of course. However, a professional assessment can be drawn by analysing like-for-like sites, having regard to a variety of factors including those that are site specific as well as larger locational considerations such as local traffic volumes.
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