- The fund has acquired 18 Gull service stations in New Zealand
- It has also announced a 5% interest in an existing Charter Hall partnership that owns 204 Ampol stations across the eastern seaboard
- Site remediation issues remain the tenant’s responsibility, as is the case for all similar assets across Charter Hall
Charter Hall Retail REIT (ASX: CQR) has today announced the expansion of its Long WALE Convenience Retail portfolio along with increased income from triple net leases linked to the consumer price index.
18 Gull service stations in New Zealand have been acquired along with a further expansion of Charter Hall’s partnership with Ampol, acquiring a 5% interest in an existing Charter Hall partnership that owns 204 Ampol service stations across eastern metropolitan markets.
The combined value of these acquisitions is $101.7 million and will be funded from existing investment capacity and are accretive to earnings.
The Gull NZ portfolio consists of the majority of Gull’s 100% owned network in the country, focused on the metropolitan markets. 56% are in Auckland and 5% in Wellington. The WALE is 15 years, with a purchase price of NZD$64.5 million (AUD $58.1 million), representing a core cap rate of 6.4%.
This portfolio was secured off-market through a sale and leaseback agreement negotiated between Charter Hall and the vendor.
The Ampol portfolio has a 17.7 year WALE, with the purchase price of $43.6 million representing an initial yield of 4.53% prior to the rent review in the second quarter of FY23.
All leases for Gull and Ampol are capital light. The acquisitions will increase CQR’s exposure to direct inflation-linked earnings by about 2%.
Site remediation issues remain the tenant’s responsibility, as is the case with Charter Hall’s existing service station assets.
“I’m delighted to announce this expansion in our Long WALE convenience retail portfolio,” said Ben Ellis, Charter Hall Retail CEO.
“These acquisitions, secured off-market,raise the weighted average rent review and growth delivered from the portfolio annually.
“They provide CQR investors with a rare opportunity to access a growing inflation-linked earnings stream in a highly capital efficient manner.
“They also further expand our relationship with major retailer Ampol Ltd,while introducing Gull to our tenant mix. The acquisitions are accretive to earnings and further increase the resilience of CQR’s portfolio and the quality of income.”
