The Charter Hall announced today that it's funds have entered into an agreement to acquire a 49% interest in a portfolio of 70 long WALE, triple net lease convenience retail properties leased to BP Oil New Zealand Limited for NZ$262 million.
The acquisition is being undertaken by Charter Hall's Long WALE REIT and the Charter Hall Retail REIT in a 50:50 managed partnership.
The BP Portfolio features:
• initial yield of 6.25%;
• 100% leased with a weighted average lease expiry (WALE) of 20 years and staggered lease expiries from 18 to 22 years;
• Triple net lease structure with annual CPI rent increases (plus up to 0.5% in the first five years);
• Geographically diversified, with a 78% weighting to metro and commuter metro locations including a 51% weighting to Auckland, New Zealand’s largest city; and
• Comprises the majority of bp’s owned convenience retail properties in New Zealand.
The Long WALE REIT will undertake a fully underwritten $60 million institutional placement (Placement) to partially fund the Acquisition and associated transaction costs, and it will also undertake a $10m non-underwritten Security Purchase Plan to eligible securityholders .
Charter Hall Retail REIT’s will utilise available borrowing capacity to fund its NZD $130.8 million commitment to the partnership.
Managing Director and Group CEO David Harrison said: “This off market transaction further extends our relationship with bp, builds upon the success of our Australian Partnership and demonstrates our conviction in NNN leased Long WALE convenience retail.”
Avi Anger, Fund manager of CLW commented: “This portfolio represents an extension of our strong relationship with bp and is an excellent addition to CLW, further enhancing the portfolio WALE and increasing the proportion of NNN leased properties in our portfolio. This is an exciting opportunity for CLW to invest in the New Zealand market in a diversified portfolio of high quality properties leased to a high quality tenant with long WALE leases.”
Settlement of the Acquisition is subject to New Zealand Overseas Investment Office approval.
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