Charter Hall has snapped up 225 BP convenience retail sites, taking a 49 per cent stake in the BP-controlled portfolio.
The $1.7 billion BP portfolio was acquired by Charter Hall for $840 million on a 5.5 per cent initial yield. The portfolio has a Wale of 20 years, with staggered lease expiries from 18 to 22 years and annual CPI increases.
The group will filter the assets through a number of Charter Hall-managed property funds with the Charter Hall Long Wale REIT set to acquire a 50 per cent stake, the Charter Hall Retail REIT 30 per cent, while Charter Hall Group will pick up the remaining 20 per cent.
Moody’s analyst Sean Williams said the group’s acquisition of a significant stake in the BP portfolio is one of a series of similar REIT transactions this year aimed at releasing capital for Australian fuel convenience players.
Petroleum giant Caltex has similarly conducted an overhaul of its property portfolio, selling off up to 25 per cent of its retail assets worth as much as $500 million. Woolworths and fund manager Oliver Hume emerged as the buyers up a large swathe of Caltex assets earlier this month.
Charter Hall also picked up an Arnott’s factory in Sydney’s western suburbs in a $398.9 million sale-and-leaseback deal. The industrial facility will be co-owned by Charter Hall Long Wale REIT and Charter Hall’s Prime Industrial Fund.
Charter Hall Long Wale REIT has tapped the market for a $350 million equity raising to fund the deals.
Chief executive David Harrison said the significant acquisition activity and resulting growth has caused the group to readjust its earnings guidance from 20 per cent to 30 per cent over the fiscal year 2019.
Charter Hall, which now manages $38 billion of real estate, is forecast to expand its funds under management to well over $50 billion in the next five years.