Melbourne-based APN Property Group is pushing ahead with a plan to float its $300 million petrol station fund on the Australian Securities Exchange.

Investment banks UBS and Bank of America Merrill Lynch, that are handling the float, have invited fund managers to attend meetings outlining the plan.

APN chief executive Tim Slattery will address the meetings, which are set to highlight the Convenience Retail REIT’s portfolio of 64 service station sites, weighted towards the east coast.

The portfolio has average contractual rental increases of around 3 per cent, and long-term 13.9 year triple net leases on a weighted average basis.

Investors have been seeking higher-yielding defensive listed stocks, while there is some precedent for interest in petrol station properties after the Viva Energy REIT floated last year.

The fund could generate a distribution yield of between 6.75 per cent and 7.25 per cent, depending on investor demand and the portfolio’s final metrics.

Convenience Retail REIT’s major tenant is Puma Energy Australia, making up 71 per cent of the portfolio, with Woolworths comprising 22 per cent and 7-Eleven 6 per cent.

Investors will meet APN’s proposed fund manager Chris Brockett, APN senior consultant Tim Boyce and Puma Energy Australia general manager Ray Taylor.

Puma Energy’s parent group is an oil supplier across five continents and had global sales of over $US12.7bn ($16.6bn) last year.

In Australia, Puma Energy operates or supplies over 240 retail sites and 22 depots.

Once listed, the trust will likely serve as an expansionary vehicle as it is positioned as Puma’s preferred capital partner as the chain seeks to further expand its network, with the focus on Victoria and NSW. APN Property Group has around $2.5 billion in funds under management.

Extracted from The Australian.

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