This article is from the Australian Property Journal archive
THE Charter Hall Retail REIT (CQR) has picked up a 49% interest in 20 Ampol fuel and convenience retail centres for $50.5 million, adding another service station portfolio to the Charter Hall platform.
The portfolio was bought on healthy yield of 5.0%, and the remaining 51% interest will be retained by Ampol. It has triple net leased centres with a 15.6-year weighted average lease expiry and CPI-linked annual rent escalations with a 2% floor and 5% cap.
Three-quarters of the assets are in metro and commuter metro locations, and all are perched on prominent main road locations that the CQR said underpins existing land values and provides flexibility for alternate uses in the future.
Following the acquisition, Ampol will be CQR’s eighth-largest tenant and represent approximately 1% of portfolio income.
“We are delighted to announce today’s acquisition and introduce another major convenience retailer to the CQR portfolio. Today’s acquisition is consistent with our strategy of growing our exposure to market leading convenience retailers and further enhancing the resilience, growth and stability of CQR’s income,” Charter Hall Retail CEO, Greg Chubb said.
“The NNN leased nature of these assets and Ampol’s ongoing co-ownership of this portfolio provides CQR investors with an attractive and capital efficient lease structure, while introducing a new partnership with a leading operator in the fuel and convenience sector.”
Rebadged from Caltex, Ampol’s ambitions to release capital from the freeholds of its sites extends back two years following a heavy hit to its profit. It then sold off 25 freehold sites to Woolworths, Oliver Hume and other developers for $136 million. Last year, Charter Hall teamed up with Singapore’s sovereign wealth fund GIC to acquire a 49% stake in a new $1.4 billion Ampol Property Trust with more than 200 convenience retail properties across Australia.
In October, Ampol put a further national portfolio of 18 surplus fuel station sites up for sale, varying from 345 sqm to more than 2.5 hectares in size and considered to be more valuable as development opportunities.
For its part, Charter Hall in 2019 took a 49% interest in a $1.7 billion portfolio of 225 BP-branded petrol stations, and extended its partnership with BP a year ago with the creation of a new fund that will take a 49% interest in a NZ$534 million portfolio of 70 fuel stations across the ditch. Ownership of the Charter Hall managed fund is split between CQR and Charter Hall Long WALE REIT.
CQR’s new acquisition will be funded from existing debt facilities and is expected to settle in February. Post-acquisition, pro forma look-though gearing is expected to be approximately 34%, within the 30 to 40% target range.
The trust has also upgraded its guidance following the acquisition. FY22 earnings per unit is expected to be no less than 28.2c per unit, representing at least 3.3%, while FY22 distributions will be no less than 24.3c per unit, representing growth of at least 3.8%.
It is expected that the second half FY22 distribution will be greater than the first half, distribution, reflecting the timing impacts of COVID-19 tenant support.
The announcement arrived at the same time that a Queensland-based family splashed out $23 million for an Ampol-anchored retail and convenience centre in western Sydney, marking one of the highest prices ever paid for a service centre in New South Wales.
