This article is from the Australian Property Journal archive
PUB landlord ALE Property Group has booked a $51.6 million gain on the value of its 86-venue portfolio following a rent determination process.
The 4.4% value increase on June values takes its portfolio value to nearly $1.226 billion at the end of October, with weighted average adopted yield firming to 4.94% from 5.08%.
ALE is Australia’s largest listed pub owners, venues are leased to Woolworths-backed ALH Group, which is the largest pub operator in the country.
“The independent valuations announced today reflect strong demand for prime assets secured by investment grade tenant covenants with long lease terms, with transaction yields holding at pre COVID-19 levels,” ALE said.
ALE is currently challenging independent valuers’ assessments in the Supreme Court of Victoria that rent across 19 assets in the state should remain mostly unchanged.
Rent determinations were made across 43 assets in its portfolio after ALH refused to agree to 10% increases following a November 2018 rent review that stipulated maximum movement of 10% higher or lower.
Independent valuers were of the opinion that the uncapped rent for the overall portfolio is approximately 33% higher than current passing rent, although the variance is not distributed evenly across the portfolio.
ALE said its Supreme Court proceedings were “made on the basis that the determinations are the outcome of the application of an incorrect methodology”.
ALE has collected 100% of portfolio rent through the COVID-19 pandemic including back rent due in relation to the determinations.
All of ALE’s properties are now open following the reopening of hospitality venues in Victoria on 9th November.
