Feasibility tool
Service station feasibility
Step 1 capitalises fuel and shop rent into a completed value. Step 2 lets you shape the funding.
Inputs
Indicative only — a guide, not a formal feasibility, valuation or finance offer. Send us your numbers for a considered view.
Understanding service station feasibility
A service station feasibility calculator capitalises the rent from the fuel offer and the convenience/QSR component into a completed investment value, then sizes the debt against that value and the build cost.
Specialty assets like service stations are valued on their completed, leased income — so the strength of the operator covenant and the lease do much of the heavy lifting when a lender assesses the deal.
The metrics, explained
Total development cost (TDC) is everything it costs to deliver the project — land, construction, professional fees, contingency, finance interest and brokerage. Loan to value (LVR) is total debt divided by the end value; loan to cost (LTC) is total debt divided by TDC. Lenders size senior debt to the lower of an LVR and an LTC limit, so both matter. Return on equity (RoE) is development profit divided by the equity you contribute; margin on cost (RoC) is profit divided by TDC — lenders usually want to see a margin comfortably into double digits. The blended cost of funds is the weighted-average interest rate across your debt layers — the true cost of the capital stack once mezzanine or preferred equity is added. The equity multiple is how many times your cash equity comes back.
More leverage lifts return on equity but raises LVR, LTC and the blended cost of funds — the art is fitting the layers so the numbers still clear the lender’s limits and leave your margin intact. Move to Step 2 and slide the senior and mezzanine layers to see it happen live, then send us the deal for a considered view.
Frequently asked questions
How is a service station valued?
On its capitalised net rent — the fuel rent (a cents-per-litre rate on projected volume) plus the shop/QSR rent (a percentage of turnover), divided by a market capitalisation rate. The calculator does this for you in Step 1.
What leverage is available on a service station development?
Because the asset is valued on a leased income, senior debt is sized against that completed value and the total cost — often a single senior facility with no mezzanine. Model your own leverage in Step 2.
Do I need a signed operator lease before funding?
A committed operator lease materially strengthens the submission and the leverage, because the lender is underwriting the tenant covenant. We can talk through timing on your specific deal.
Which page covers this service?
See service station development finance for how we structure and package these.