Proving its interest in alternative real estate investment assets, listed-Charter Hall announced it has contracted to buy a 49 per cent stake of BP’s retail properties across New Zealand, further building on its partnership with the petrol “supermajor”.
Secured off-market in a sale and leaseback deal, the portfolio consists of 70 BP-owned convenience petrol station and their retail properties.
The Charter Hall consortium will purchase the 49 per cent share of the New Zealand $534 million portfolio, through its newly-created fund.
The latest move builds on Charter Hall’s petrol station empire plans, following its partnership with GIC, for a 49 per cent stake in 203 freehold Ampol petrol stations—currently branded Caltex, just last month.
The commercial real estate market saw a significant rise in “alternative” real estate investment such as petrol stations during 2019, led by Charter Hall which outlaid $840 million for a 49 per cent stake in 225 BP fuel stores, a deal that valued BP’s portfolio at $1.7 billion.
The majority of the New Zealand portfolio is located in metropolitan locations with 72 per cent located in New Zealand’s largest three cities, and 51 per cent located in Auckland.
“This off-market transaction further extends our relationship with BP, builds upon the success of our Australian partnership and demonstrates our conviction in NNN leased Long WALE convenience retail,” group chief executive David Harrison said in the announcement.
Half of the managed fund will be owned by Charter Hall Long WALE REIT, and the other half by its retail REIT.
The fund value is approximately NZD $262 million and represents a 6.25 per cent initial yield.
The transaction involves a 20-year WALE at acquisition, with initial lease terms of the properties ranging from 18 to 22 years.
The deal’s finalisation is subject to approval by New Zealand’s overseas investment office.