Investors Eye C-Stores as Pandemic Plays

In addition to hotels and pipelines, value-seeking investors like gas stations.

September 24, 2020

ALEXANDRIA, Va.—Hotels, pipelines, automaker bonds—and convenience stores—are among the assets being bought by big institutional investors as they look for value in a world thrown into turmoil by the coronavirus pandemic, reports

In interviews with money managers across Asia-Pacific and Europe that collectively manage about $3.4 trillion, one thing was clear: Many are avoiding the overheated stock market. They think much of the rebound in markets and valuations is the result of low interest rates, massive central bank stimulus and temporary government fiscal support.

GIC Pte., Singapore's sovereign wealth fund, is looking at "less loved" areas from retailing to infrastructure, whose valuations have been pummeled by the pandemic, said Lim Chow Kiat, CEO. In two of its largest deals this year, it was part of a group that acquired a 49% stake in ADNOC Gas Pipelines for $10.1 billion, and last month, the company teamed up with Australian property group Charter Hall in a A$682 million ($500 million) acquisition of more than 200 convenience stores attached to gas stations.

"Once you've contained the virus, domestic travel can come back even if international travel can't," said Jeffrey Jaensubhakij, CIO.

Consolidation has been one of the dominant themes in the convenience and retailing industry for the past few years. In the U.S. market in 2019, United Kingdom-based EG Group was a dominate M&A player, purchasing Westborough, Massachusetts-based Cumberland Farms and its 567 stores, as well as select sites from Certified Oil and Fastrac. Des Moines, Iowa-based Yesway continued its buying spree, acquiring Allsup’s Convenience Stores, a 304-store regional chain based in Clovis, New Mexico.

Between 2015 and 2019, half of the 20 largest chains in the industry have gone through some sort of merger or acquisition, consolidating a major portion of stores with the largest chains, according to data presented at the NACS 2019 State of the Industry Summit (SOI).

Coronavirus Resources

NACS has compiled resources to help the convenience retail community navigate the COVID-19 crisis. For news updates and guidance, visit our coronavirus resources page.