seven eleven logo shop convenience store retail
68% of income from the recent acquisition will come from 7-Eleven. Image – Canva.
  • $59M in acquisitions spread across Queensland
  • Majority of acquisitions includes 7-Eleven
  • Weighted average capitalisation rate 6.2%, portfolio WALE 11.7 years.

Late last week, APN Industria REIT (ASX: ADI) saw its property valuations up $64 million, representing an 11.9% increase in portfolio value.

The industrial property market has been experiencing extraordinary circumstances, with vacancy rates in some areas as low as 0.25%, and the average cap rate compressed by 51 basis points.

The news

APN Convenience Retail REIT (ASX: AQR) yesterday announced the acquisition of six service station and convenience retail properties in Queensland.

The $59 million acquisition represents “an average purchase yield of 5.50%,” the company welcoming well-known brands into the portfolio, including 7-Eleven, Anytime Fitness, BWS, Oporto, and Thrifty Car Rentals.

AQR said the properties are all newly built between 2014 and 2017, with 68% of income to be driven by 7-Eleven’s lease, followed by Oporto with 6%, Anytime Fitness at 5%, and Thrifty Car Rentals and BWS both at 3%.

apn convenience retail reit table of acquisition values yield and wale
APN Convenience Retail REIT table of acquisitions. Image – APN Convenience Retail REIT.

Telstra and Vodafone also made an appearance, the companies taking leases on telecommunication towers held by AQR.

“The combined weighted average lease expiry of the portfolio is 10.1 years and the weighted average rent review is 3.19% per annum.”

Portfolio effects

APN Convenience Retail REIT said, “Following settlement of this portfolio, which is scheduled to occur in September 2021, AQR’s portfolio will comprise 97 properties valued at $619 million, reflecting a weighted average capitalisation rate of 6.2% and a portfolio WALE of 11.7years.”

“The acquisitions will be funded from existing debt facilities and commitments. AQR’s gearing will be 32.2% on a pro forma basis adjusted for the remaining development pipeline, comfortably within the Fund’s 25% -40% target range.”

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