Fund manager Charter Hall will take a near half-stake in a $490 million portfolio of BP fuel and convenience retail outlets in New Zealand, following on from a similar type of deal in Australia last year.
The sale and leaseback-style deal with BP gives Charter Hall a 49 per cent stake in a portfolio of 70 properties. Most of the service stations are in New Zealand’s three largest cities. The average lease across the portfolio is 20 years.
Two ASX-listed property trusts managed by Charter Hall, its Long WALE REIT and its Retail REIT, will own equal stakes in a new fund created to hold the BP investment.
Equity raising
The Long WALE REIT will launch a $70 million equity raising, most of it through an institutional placement, to back its investment into the petrol station and retail properties.
The New Zealand tie-up comes after Charter Hall struck a similar deal with BP in the Australian market by taking a 49 per cent interest in an even larger portfolio of petrol stations.
The BP portfolio in Australia was worth about $1.7 billion in total when the deal was struck last December. That portfolio comprises 225 convenience retail properties, most of which are located in metro or commuter metro locations on the eastern seaboard.
Led by David Harrison, Charter Hall is proving increasingly adept at creating large-scale commercial property investments for its managed funds and mandates through sale and leaseback transactions.
The property fund manager has struck a series of such deals in recent months, including with Telstra, Ampol and Visy.
Mr Harrison has also flagged the prospect of sale and leaseback transactions with universities looking to recycle capital from their vast real estate holdings as revenue from foreign students dries up.
“Governments, education facilities, corporates, are all going to pursue further sale and leasebacks so they can invest that capital in the operating business that they are actually set up to provide,” Mr Harrison told The Australian Financial Review earlier this month.
Extracted from AFR