This article is from the Australian Property Journal archive
THE $11 billion Telstra Superannuation scheme and Charter Hall have teamed up to buy a portfolio of Bunning Warehouse stores around Australia for $207 million.
The JV will buy seven recently competed Bunnings Warehouse stores from Bunnings, a subsidiary of Wesfarmers, for $176 million.
They will also purchase a Bunnings anchored property at Stafford in metropolitan Brisbane from the Charter Hall managed Direct Retail Fund for $30.7 million.
The combined $207 million purchase reflects an initial acquisition yield of 7.6% post acquisition costs and provides 3% per annum rental increases.
The portfolio will be held within a newly established unlisted wholesale partnership (BP Fund) owned 90% by Telstra Super and the remaining 10% equity (amounting to $10.8 million) held by the Charter Hall Property Trust co-investment portfolio.
BP Fund will progressively draw $105 million from a new debt facility which together with the total equity commitment of $108 million will complete the transaction, including transaction costs.
Charter Hall will provide management services for the newly established partnership, which is expected to be marginally earnings accretive in FY13 for Charter Hall.
Charter Hall’s joint managing director David Harrison said the average 13.3-year WALE secured from the Bunnings portfolio will provide long term income security from a high calibre tenant.
Telstra Super CEO Martin Crowe said the investment provides the defensive investment characteristics sought by Telstra Super in investing in direct property.
“Our members will receive a consistent income stream from a quality tenant over a medium to long term. This acts as a risk mitigant and helps underpin future returns for our members.”
This is the third venture between Telstra Super and Charter Hall. They first joined forces in October 2010 to buy Brisbane Square from WA’s largest industry superannuation fund, Westscheme, for $300 million.
In May 2011, they teamed up again to buy a portfolio of shopping centres from Woolworths for $266 million. Followed by the purchase of the Gladstone shopping centre in Queensland, from a syndicate managed by the Centro for $17 million in December.
But Telstra Super is not exclusively tied with Charter Hall. Earlier this year the fund committed to a $2 billion wholesale property trust launched by Lend Lease, alongside the Canada Pension Plan Investment Board, the Lend Lease managed Australian Prime Property Fund Commercial and First State Super.
Telstra Super has also splashed $34 million for a 50% equity Aspen Group’s 12-26 Franklin Street Property Trust, which developing the $190 million Australian Taxation Office project in the Adelaide CBD.
Property Review
