APN Convenience Retail REIT (AQR) has acquired a portfolio of six service stations across Queensland for $59 million.

Through AQR’s responsible entity APN Funds Management — which is subject to a takeover bid from Dexus — the company said the purchases represented an average yield of 5.5 per cent.

Built between 2014 and 2017, the properties collect 80 per cent of its income from major tenants 7-Eleven, Oporto, Anytime Fitness, Thrifty Car Rentals and BWS.

The remainder of the rent is derived from other national and local convenience retailers, as well as two telecommunication towers, leased to Telstra and Vodafone.

The combined weighted average lease expiry of the portfolio is 10.1 years and the weighted average rent review is 3.19 per cent per annum.

“This is another exciting portfolio acquisition which reflects our ongoing active approach to growing the portfolio in a prudent and disciplined way,” AQR fund manager Chris Crockett said.

“These properties are outstanding examples of well located, designed and built service station and convenience retail centres, with a great mix of national and local retailers,” he added.

“All sites are strategically located on main arterial roads and are exposed to high traffic flows,” he concluded.

Following the settlement of this portfolio, which is scheduled to occur in September, AQR’s portfolio will comprise 97 properties valued at $619 million.

This reflects a weighted average capitalisation rate of 6.2 per cent and a portfolio weighted average lease expiry of 11.7 years, according to the company.

The acquisitions will be funded from existing debt facilities and commitment.

Recently, the company completed new 10-year leases across its 13 sites leased to EG Group, with a 2.4 rent decrease, representing a 0.3 per cent decrease of the total portfolio rent.

Sites leased to EG Group represents 13.2 per cent of the fund’s retail income with the new leases pushing 91.4 per cent of its leases to expire in FY30 and beyond.

AQR shares rounded off Wednesday’s session 0.27 per cent higher, trading at $3.65.

Extracted in full from: https://themarketherald.com.au/apn-convenience-retail-reit-asxaqr-fills-up-on-petrol-stations-2021-05-13/