The listed petrol station fund run by APN Property has launched a $55 million raising to bolster its balance sheet as it eyes fresh acquisitions.

The $320 million fund with 83 sites around the country, APN Convenience Retail REIT, has so far proven resilient to the pandemic-induced slowdown, reaffirming its guidance for earnings and distributions in financial year 2020.

APN Convenience Retail REIT has so far proven resilient to the pandemic-induced slowdown, because service stations were deemed to be an essential  service. Evelyn Barota

The property trust also said its 2021 distribution “is not expected to be less” than its 2020 payout.

“APN Convenience Retail REIT is further strengthening its balance sheet in light of current market conditions,” fund manager Chris Brockett said.

“However, we do see the COVID-19 pandemic creating off-market acquisition and development fund-through opportunities with vendors and developers targeting buyers that can provide cash certainty and speed of execution.

The raising – comprising a $50 million placement underwritten by Moelis and a $5 million offer to unitholders – would put the fund “in a strong position to capitalise on these opportunities as
they arise”, he said

The placement price is $3.20, which represents a 4.8 per cent discount to the last close and a 7.6 per cent discount to the five-day average.

The fund has already flagged a $10 million acquisition of the Coles Express Gatton and Coles Express Inverell. As well, it has another four sites under exclusive due diligence, totalling around $40 million in deals.

The impact of COVID-19 on the fund’s portfolio had so far been minimal with all its sites trading, it said. Service stations were deemed to be an essential service and were allowed to stay open throughout the lockdown.

Just six of its smaller non-fuel tenants – representing around 1.2 per cent of portfolio rental income – have applied for rent relief.

Puma Energy leases most of the sites held in the APN-managed property trust: 46 sites ,representing 58 per cent of rental income.

The fuel retailer’s Australian business is being taken over by Chevron in a $425 million deal struck last December. The transaction is expected to be finalised by June 30.

The APN-run fund said that deal would not change the structure of its leases – which had long-dated expiries – with the Puma outlets, and it had approved the change of control provisions in the agreements.

The fund has reaffirmed FY20 guidance for its funds from operations at between 21.5¢ and 21.8¢ per unit. It expects to deliver distributions of 21.8¢.

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