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Keys Attributes for Land for Gas Station

February 17, 2022
Suitable land for gas station must meet specific qualifications and proper regulation measures to be an appealing development site for retail oil businesses. Read CBRE’s guidelines to discover the ideal land for gas station business.
Image | CBRE

Is Your Plot of Land Fit for a Gas Station?

Here are the Ideal Factors Developers Look For

Suitable land for gas station must meet specific qualifications and proper regulation measures to be an appealing development site for retail oil businesses. During the global economy slowdown, big developers are more likely to lease rather than to purchase land, particularly in high-density areas like Bangkok and vicinity areas where the competition is generally high and land prices are expensive. On the other hand, the new Land and Building Tax Act, which came into effect on 1 January 2020, and the tax payment that has been extended to August 2020, will introduce the highest tax rate for landlords with vacant land in comparison to agriculture, residential and commercial land taxes.

Among the solutions available for landlords, land leasing for gas stations has become a favourable choice for long-term investment, which not only promises land tax deduction, but rental returns and capital gain. To determine whether a site has appropriate geographical features to contain a gas station, go through CBRE’s guidelines below to discover the ideal land for gas station business.

1. An Easy Access Location

Without this essential feature, developers would not see prospective customers and their vehicles queuing up to fill their gas tanks at the land plot. Landlords should investigate whether their land is near a densely populated residential area, an industrial estate, a new main road, highways in the upcountry or roads with a high volume of traffic. Other higher potential land plots that attract gas station retail businesses are upstream land or the first plot of each road. If the surrounding area is currently under development, landlords are recommended to research where the main roads, access points and other landmarks will be before investing in a land-for-leasing business.

2. The Right Specification

Potential land for gas station in Bangkok and upcountry should be square or rectangular with the following requirements:

Location Frontage Size
Bangkok 40 - 60 metres 1 - 2 rai (1,600-3,200 sq.m.)
Upcountry 80 - 100 metres 4 - 6 rai (6,400-9,600 sq.m.)

3. Laws and Regulations Requirements

Before landlords decide to advertise their land for gas station, it is recommended to check the specific zoning requirements, laws and regulations with local authorities to determine whether construction such as gas stations can take place on the land plot. It is also important to have public utilities such as electricity, water supply and drainage close by.

Some areas’ specific zoning restrictions include a gas station to be located 30 metres away from junctions and 50 metres away from U-turns, crossroads, and bridges. It is also required for gas station to be located 30 metres away from railways, rivers or canals, and high-voltage electricity posts. Especially in Bangkok, gas stations are required to have a 15-metre minimum distance from the road while some areas do not allow signboard installation greater than 1 m. x 1 m. and the signboard must not exceed the weight of 10 kilogrammes.

4. The Importance of Future Infrastructure

When exploring land for gas station, landlords should expect future infrastructure projects around the area to play a strong role in terms of successful lease and retail businesses. Future land development like frontage roads may be a disadvantage for interferences with the gas station entrance. Road expansions, motorway entrance and exit points can turn an unused plot of land into an attractive location site for gas station retail developers.

Whether you are an investor looking to reduce expenses on land taxation or increase your rental yields, it is important to note that the term for land leasing to guarantee the land’s investment returns subjected to economic feasibility is commonly at least 20 years. However, a shorter term can be negotiable for some reasons such as offering low rental price or no upfront payment. The total leasehold cost of a whole period can vary around 30–60% of the freehold price depending on land value.

These guidelines cover the basics for potential land plots suitable for gas station development. Seeking a trusted real estate consultancy firm is also recommended for in-depth valuation and analysis to bring plans for successful land-leasing to fruition.

Please do not hesitate to consult our professional team at CBRE.

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