If you already own land, you will need to carry out a “Feasibility Assessment” that will help to assess whether a service station on the property would be profitable

If the land is owned by traditional authority then it is wise to first carry out a “Feasibility Assessment” on the land before talking to the Chief. If the assessment is positive then one can acquire the land.

One of the services offered by Credeco (Pty) Ltd Is to carry out a “Feasibility Assessment” on land that our clients own or on land that our clients intend to buy.

A “Feasibility Assessment” is a report that shows whether a future service station built on a property will most likely be profitable. This is done by projecting the amount of fuel sold on the property.

If you don’t own land, Credeco (Pty) Ltd is able to carry out a “Site Identification” process to help you identify the right property for you to buy and develop as a service station.

A “Site Identification” process involves a search for the best possible land for you to buy and build a service station on. This includes a spatial analysis, traffic flow analysis and competitor assessment.

After a site is identified Credeco (Pty) Ltd will initiate the negotiation process in order to establish a “willing buyer” and “willing seller” premise between the yourself and the property owner.

The price of land differs from one area to the next. This is caused by factors such as demand and supply, zoning and fixed structures. However, price is generally set by the average sales of similar properties in the area.

No. it is better to sign an offer to Purchase (OTP), subject to a suspensive condition that an oil company must agree to a lease or a supply agreement before the land purchase is concluded.

Credeco (Pty) Ltd is able to assist with contract negotiations between yourself and oil companies. A number of companies may be approached with the intention of seeking the best possible terms.

Oil companies require potential site to show fuel projections of 350 000 litres per month or more. Other key factors include the possibility of zoning, access, site and retail licencing approval.

Oil companies do expect you as the applicant to be responsible for the different application approvals for rezoning, accesses, licencing as well as environmental impact assessment.

The cost of approvals depend on the property consultants you hire and how much they charge. However, a budget of R600 000 Should be enough to initiate the land development process.

It possible for a contract with an oil company to include a certain level of funding however, the amount does depend of the profitability of the opportunity and its associated channel of trade.

Service Station are divided into 3 main channel of trades namely, 1. Company Owned (CO-Sites) 2. Dealer Owned (DO-Sites) and 3. Company Leased (CL –Sites).

CO- Sites are sites that are owned by the oil companies. DO-sites are sites that are owned by the dealer and CL-Sites are site that are leased by the oil companies.

Oil companies are more lightly to invest in company owned (CO-Sites) and company leased (CL –Sites) sites instead of sites that are owned by the dealers.

The cost of building a service station varies per site. This depends on the size of the site and shop, the number of pumps etc. however, a standard site may cost between R18mil – R20mil.

Oil company funding is not guaranteed, but varies from project to project and largely depends on the profitability and lease period associated with the proposed service station.

The contract will specify the responsibility of the applicant as well as that of the oil company. This would outline the part of the development you and the oil company would fund and be responsible for.