VALUATION OF…
Filling Stations
Fuel and service station properties, valued on lease covenant, GLA, and forecourt improvements.
Content status: Methodology and evidence log — Sources, Caselaw and Market Information are added incrementally.
Methodology
Filling stations are trading properties, typically let to a fuel company or independent operator on a lease with rental linked wholly or partly to fuel throughput. The Income Capitalisation Method, applied to a sustainable rental derived from trading performance, is the primary approach.
Applying the Big Five framework, the Income Generating Units — forecourt and canopy, convenience store, workshop bays and car wash — are identified and analysed separately, as each carries a different rental basis. Contract rental is tested against market rental for comparable sites on similar traffic counts and visibility, a vacancy allowance is generally low given the operational nature of the asset, and the capitalisation rate applied reflects the operator’s covenant strength and the remaining term of the fuel supply or franchise agreement.
Throughput (litres sold per month) and site visibility on a high-traffic route are the dominant value drivers. A Direct Comparison cross-check on a rate per square metre of site area, or a rate derived from comparable throughput-linked sales, should be used to test the primary valuation.
Caselaw
Case law, regulatory rulings and expert-determination disputes relevant to valuing this asset class. Each entry cites its source and summarises the practice implication for valuers — this is not investment, financial, or legal advice.
The Evidence Log is for VDH Members
The Evidence Log for Filling Stations — sourced sales, disposals and rentals with Valuer’s Lens commentary — is included in VDH Membership: from R125/month for SACPVP candidates and students, R399/month standard. All prices include VAT.
The methodology and case law on this page remain free to read.