What is driving expansion?

The increase in forecourt numbers is fuelled by two key forces: growth in operational profitability and scarcity of available property. The current operational market has more buyers than sellers. Therefore, we have observed an increase in NTI (new to industry) development. However, typical barriers to entry will always exist by way of planning and highways matters, which somewhat suppress activity. The ‘knock-on effect’ has been a simple factor of supply and demand, with a growth in encumbered forecourt values.

The continuous growth is further reflected by the number of vehicles on British roads reaching its highest-ever level in 2024, rising by 1.4% to 41,964,268, according to data published in April by the Society of Motor Manufacturers and Traders (SMMT), with cars up 1.3% to 36,165,401, and vans up 1.8% to 5,102,180 units. The shift from internal combustion engines (ICEs) to battery electric vehicles (BEVs) faces persistent challenges, which include limited power infrastructure, high costs, range anxiety, and land viability for charging. BEV uptake is rising but still accounts for a small share of the refuelling market, underscoring the ongoing need for the PFS.

Revenue sources

The modern forecourt will derive revenue from multiple sources:

Whilst fuel sales remain the backbone of the revenue and profit achieved at a filling station, many modern forecourts generate revenue from diversified income streams. Large convenience stores often feature, with in-store concessions operated directly.

Growth in valeting has been seen in jet washing, with operators investing in new facilities and other forms of automated contactless wash systems.

Laundrettes, parcel delivery boxes, and ATMs add further income by way of third-party agreements, all contributing to the bottom line.

Many operators are now looking to add EV charging to their existing operations, where capacity, with regard to power and physical space, allows. While margins from these elements remain modest compared to core operations, they represent valuable supplementary income and offer strong potential for future growth as the sector evolves.

Margin growth

Fuel margins have grown over the last ten years, a matter which has been noticed by the CMA and the press.

Operational costs have, of course, increased during this time, by way of increases to the national minimum wage, national insurance contributions, energy prices, and interest rates. All factors that fall outside the control of the operator.

The CMA launched an investigation into the growth in margins. The outcome of which was to launch a fuel national pricing scheme. The scheme intends to allow the public to compare prices online prior to purchase and is intended to be available from the end of 2025. An initial ‘soft launch’ is available and has been since 2023. As part of the initial launch, retailers are voluntarily providing data on pricing. These retailers combined make up 35% of the filling stations in the UK, representing 60% of retail fuel sold in the UK. This shows a willingness of the market to comply with the proposed scheme and a confidence in the sector.

Reversion

Following an improved operational market over the last five years, historic rents may now have room for growth. A 15-year lease agreed in 2015, subject to RPI increases, could now be considered as reversionary.

Owing to the vibrant operator market and the reversionary nature of the properties, vacant possession value underpin is likely to represent a significant proportion of investment value overall, if not exceed it in some instances.

Fuel retail investment market: momentum builds

As of the end of H1 2025, there had been more investment transactions than in the full year 2024, as shown in the graph below.

Forecourt operators are actively acquiring investment properties, often with strategic intent:

• Future occupation at lease expiry
• Sector reinvestment in lieu of direct occupational opportunities
• Lease buyouts to secure long-term control

What’s next?

We expect the operational unencumbered market to remain highly sought after, potentially exceeding traditional investment values in select cases.

As more long-term leases with indexation approach renewal, rental growth is anticipated.

Institutional funds are also re-entering the market, drawn by the sector’s consistent performance and resilience.

Insight

The fuel retail sector is no longer just a niche play – it’s becoming a mainstream investment class, with both operators and funds recognising its long-term potential.

Stable yields and longer lease terms continue to support values.

Forecourt operators continue to enjoy strong profitability.

Outlook

In summary, the UK forecourt sector is evolving rapidly, driven by rising margins, diversified income, and strong investor confidence. With limited supply and expanding operator ambition, the market is well-positioned for continued growth, both in operational performance and asset value. PFSs are no longer just about fuel; they are dynamic, multi-revenue assets in a market full of momentum. The forecourt remains firmly in focus.

To further discuss the latest insights, please contact the Automotive team via the Authors panel