Gretchen Friemann & Bridget Carter

Viva Energy has fired the starting gun on one of the largest initial public offerings of the year, with broker research on a $2 billion portfolio of petrol stations set to hit investors’ desks on Monday.

As The Australian revealed recently, the gas giant intends to tap public markets for close to $850 million in a deal executed by Deutsche and Bank of America Merrill Lynch, delivering the newly formed landlord a market capitalisation of $1.3bn.

Viva, the Australian arm of Dutch fuel giant Vitol, was forced to shelve its tilt at the boards last year due to market volatility and a lengthy legal battle over the terms of franchising with Coles Express.

However, the supermarket giant abandoned the fight last month, paving the way for the float of 425 Coles-branded petrol stations.

Unlike last year, the timing of the much-awaited resolution has proved fortuitous with borrowing rates sinking to a fresh low in the wake of last month’s cut by the Reserve Bank, leaving Viva to capitalise on another display of investor enthusiasm for listed real estate.

In a string of meetings with Australian fund managers early next week, analysts from Deutsche and BAML are expected to emphasise Viva’s dominant grip on the sector — its petrol stations account for 24 per cent of the market — as well as the blue-chip covenants that span 15-year lease terms and carry a 6 to 6.5 per cent yield.

As the appetite for property trusts intensifies, Viva’s determination to strengthen its foothold on the fragmented petrol station market is also expected to curry favour with prospective investors.

The analysts will front Asian investors at the end of the week.

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