APN Property Group has considered listing a new $300 million fund on the ASX that will own freehold land from Puma Energy’s petrol stations around Australia.
APN is in due diligence to buy an initial $120 million tranche of Puma’s stations with a separate second tranche likely to be transacted at a later date.
Puma, which is owned by Trafigura, has been buying and rebranding petroleum companies such as as Matilda, Neumann and other small independents to create a vast collection of outlets.
The move by APN is likely to be strongly supported following thesuccessful ASX-debut of the Viva Energy REIT, which owns 425 petrol stations under an alliance agreement between Coles Express and Viva Energy.
Viva, advised by Deutsche and Bank of America Merrill Lynch, listed earlier this month after raising $911 million. Its stock price surged 16 per cent on the day of listing and is currently trading 13 per cent higher. It is the only pure-play service station site owner listed. Previously named Vitol, the company purchased the stations from Shell in 2014. Viva maintained an interest in that listed fund and would likely retain an interest in any fund that APN listed.
APN already manages the APN Property Plus Portfolio – an unlisted direct real estate fund invested in a geographically diversified portfolio of Woolworths petrol outlets, 7-Eleven petrol outlets and a Shell petrol outlet. Woolworths accounts for 73 per cent of the tenancy mix. The fund has a weighted average lease expiry of 4.25 years by income and is geared at 46.8 per cent.
As of December 2015 that fund was worth about $80.2 million and it is thought part or all of that fund may eventually be woven into the new listed fund.
APN declined to comment on the potential deal.
The service station segment of the property market has been a focus for prospective property investors recently with Woolworths now turning its attention to the sale of its petrol station operation through newly appointed adviser Morgan Stanley. That may present a further opportunity for APN to beef up the portfolio size in preparation for a listing.
It is likely that Puma will provide a long-term lease back arrangement to APN including 15-year leases if a deal is struck.
A private investor group Ferradini Property recently bought a service station at 932 Boundary Road in Coopers Plains, Brisbane, for $2.2 million. The property was leased to Puma Energy.