Charter Hall Fuels Up on Service Stations

In a recent announcement, Viva Energy, which holds a 35.5% stake in the property trust, declared it is selling 5% to listed fund manager Charter Hall, in addition to a further 5% stake to ‘Charter Hall Long WALE REIT’.

Viva Energy also advised that the remaining interest (25.5%) will be sold down via an underwriting agreement with UBS and Bank of America.

The property trust controls a portfolio of 469 service stations across the country, valued at close to $2.7 billion.

The advised purchase price for each 5% stake was $103.5 million.

This came after recent announcement of the acquisition of a 49% interest in a portfolio of 225 convenience retail properties leased to BP Australia Pty Ltd, with lease expiries of between 18-22 years and triple-net structure with annual CPI increase; the portfolio had a 20-year WALE. Charter Hall will invest $840 million for its stake.

The BP sale is advised to have transacted on an initial yield of 5.5%.

The above transactions are indicative of strong fundamentals within the investment grade convenience retail/service station market and suggest views from the broader market are not yet factoring in significant impacts resulting from the emergence of electric vehicles for at least the medium term.