Charter Hall’s retail REIT has bought a 49% stake in an Ampol fuel station portfolio for $50.5 million, reflecting a 5% cap rate.
The portfolio comprises 20 triple net leased (NNN) Ampol fuel and convenience retail centres, with 75% of the assets situated in metropolitan and commuter metro locations.
The portfolio has a 15.6-year WALE and CPI-linked annual rent escalations, with a 2% floor and a 5% cap.
Ampol will retain the remaining 51% interest.
“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,” said Charter Hall Retail CEO Greg Chubb.
“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.
“The high underlying land value and predominantly metropolitan location of the portfolio also provides significant long-term capital value upside.”
Ampol will become the REIT’s eighth largest tenant following the deal, representing approximately 1% of portfolio income.
The REIT will use existing debt facilities to fund the deal, which is expected to settle in February next year.
Following the deal, the REIT’s proforma look-though gearing will reach about 34%, within the 30-40% range.
In September last year, Charter Hall bought a stake in a $489.5m portfolio of BP fuel and convenience properties located across New Zealand.
In late 2019, Charter Hall bought a stake in a portfolio of 225 BP fuel and convenience properties located across Australia for $840 million on a 5.5% initial yield.