Jarra is pleased to announce the successful sale of its BP Greenwood Fuel Station and Convenience Store. The transaction marks the final step in the delivery of the investment strategy for investors in Ladybug Investment Trust Eight (the Fund), which will make an estimated 10% annualised return, despite significant headwinds in the broader market.
When the Fund launched, the RBA cash rate was just 0.10%, and the asset was independently valued at a 6.00% capitalisation rate, by 2025 the cash rate reaches 3.85%, and comparable service station sales average a 7.10% capitalisation rate. This repricing reflects both the impact of rising interest rates and a broader shift in sentiment toward service stations, influenced by ESG considerations and the evolving outlook for electric vehicles.
Against this backdrop, Jarra’s disciplined investment structure and proactive management approach proved critical. Following a formal sales campaign with Stonebridge Property Group and Altegra Property Group, multiple offers were received. Ultimately, an offer at a 6.78% cap rate was accepted, comfortably within Jarra’s target range and outperforming market benchmarks.
“This Fund has delivered one of the outcomes we are most proud of,” said Mike Cameron, Jarra’s Commercial Director. “As our first develop and hold investment fund launched in 2021, the result is testament our approach to investment structuring. Had we acquired BP Greenwood as a passive, going concern investment, it’s likely investors would have realised a loss. Instead, the Fund has delivered an estimated 10% annualised return over the holding period, a result that speaks to the strength of Jarra’s approach to asset selection, investment structuring, active management and investor alignment.”
Brett O’Neill, Stonebridge Executive, noted “Western Australia’s fuel and convenience retail sector continues to attract strong interest from East Coast private investors. This trend underscores a compelling arbitrage opportunity on the basis of a risk-adjusted return, with purchasers drawn to the sector’s proven fundamentals: high profile, land-rich sites secured by long-term net leases providing an annuity-style income stream.”
From establishment, Jarra took a proactive approach to de-risk the project. Prior to opening the Fund, our team secured Development Approval, a binding lease pre-commitment, a fixed-price construction contract and senior bank funding. Construction of the asset was completed efficiently and the lease commenced within six months of unit issuance, bringing forward income and delivering a higher stabilised yield than a passive acquisition would have achieved.
Throughout the investment term, Jarra actively managed the fund, including refinancing the senior debt facility to secure improved pricing. On exit, the team negotiated a favourable sale price and materially reduced transaction costs. The outcome was not the result of a rising market, but of disciplined execution and a structure designed to align Jarra’s interests with those of investors. In a materially weaker market, the fund preserved capital and delivered a solid return, an outcome that would not have been possible under a traditional, passive investment model.
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