Fawkner Property Group has agreed terms with Waypoint to acquire a national portfolio of 29 fuel and convenience outlets for its next Essential Services unlisted REIT.
Fawkner Property Group will acquire the portfolio for a total purchase price of $141.8m, reflecting a blended yield of 6.0% and an average lease expiry of 9 years. All of the service stations, operated by Shell Coles Express, have fixed 3% rental increases.
It is the second time, Fawkner and Waypoint have transacted in the past 12 months with Fawkner acquiring a first tranche of 31 outlets from Waypoint in November last year for $113.9m. That deal was based on a blended yield of 6.4% and a 10% premium to book value.
Today’s transaction is in line with Waypoints carrying value as at 31 December 2021.
Key information in relation to the Fawkner portfolio is set out below:
| No. of Assets | Dec-21 WALE | Sale Price | Implied Yield | |
| Capital Cities | 2 | 9.9yrs | $11.9m | 5.83% |
| Other Metro | 2 | 9.2yrs | $10.9m | 5.67% |
| Regional | 25 | 9.1yrs | $119.0m | 6.08% |
| Total | 29 | 9.2yrs | $141.8m | 6.03% |
The assets will be housed in the Essential Services Trust No. 20, which already contains a shopping centre in Cairns, which Fawkner acquired for $146 million from Stockland in November last year at a cap rate of 6.75%
The Waypoint transaction is subject to Rights of First Refusal in favour of Viva Energy Australia and Coles Group, which provide a period of 30 days in which VEA or Coles can elect to acquire any of the properties on the same terms as agreed with Fawkner.
Assuming the ROFR provisions are not exercised by VEA or Coles, the Fawkner transaction is expected to settle on 30 June 2022.
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