Singaporean sovereign wealth fund GIC and Charter Hall have announced plans to acquire a 49% interest in an unlisted trust containing a portfolio of 203 petrol stations worth $682m.
The Ampol portfolio will have initial lease terms ranging from 11 through to 22 years, a 19.2 year WALE and 10 year initial option terms, plus multiple 5 year options thereafter. The properties will be subject to CPI annual rent reviews, with minimum 2% and maximum 5% increases per annum. The property trust will receive approximately $77 million in rental payments from Ampol in the first year (on a 100% basis).
The acquisition price reflects a weighted average capitalisation rate of 5.5% and valuing the entire property trust at $1.4 billion.
Charter Hall Group will own 5% or $34 million of the Charter Hall partnership, or a look through interest of 2.45% in the Ampol portfolio.
Managing Director and Group CEO David Harrison said: “This off market transaction follows regular dialogue with the Ampol team over the past 2 years and reinforces our confidence in the convenience retail sector. The extension of our 15-year relationship with GIC further grows the breadth of this multi- sector relationship and reflects our strong market position and continued conviction for Long WALE assets with strong underlying investment fundamentals.”
Upon completion of the transaction, Ampol will hold a 51% controlling interest in the property trust and maintain strategic and operational control of the core Convenience Retail sites.
The property trust will provide a the parties a platform to acquire future sites and sell additional Ampol sites into the property trust over time. The property trust will also provide capex for site development and upgrades that meet relevant parameters. The property trust is intended to remain ungeared at the JV level.
Ampol’s Managing Director and CEO, Matt Halliday said “Following the completion of our retail network review in 2019, we identified the opportunity to unlock the value of our high-quality retail property assets through a transaction that would demonstrate value, whilst importantly allowing Ampol to retain strategic and operational control over our core Convenience Retail network.
“Today’s announcement was made possible by the significant amount of work undertaken over the past year and represents the successful execution of the strategy communicated to the market in late 2019. The transaction represents compelling value in volatile market conditions.”
Late last year, Charter Hall purchased a similar portfolio of 225 BP petrol stations, paying a price that also reflected a 5.5 per cent yield. That portfolio was ultimately owned 30% by Charter Hall Retail REIT, 50% by Charter Hall Long WALE REIT (ASX:CLW) and 20% by Charter Hall Group.
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