Viva Energy is understood to be weighing a sale of a portfolio of petrol stations, sources say.
The move, if it proceeds, would be consistent with the broader sale-and-leaseback playbook that has become increasingly common among corporates looking to unlock capital tied up in real estate without surrendering operational control of underlying assets.
Viva’s property, plant and equipment was valued at $2.97bn in December.
Charter Hall is no stranger to this kind of transaction.
However, it’s not thought to be a suitor.
Charter Hall owns in partnership with GIC and its listed retail fund a 49 per cent interest in a portfolio of 204 convenience retail properties leased to Ampol across Australia with long leases.
The listed property group has built one of the country’s most diversified real estate portfolios through exactly this type of corporate real estate recycling – and the convenience retail and service station sector has long been viewed as an attractive income asset given its long leases, essential service tenants and high-traffic locations.
Viva in 2023 purchased the On The Run fuel convenience store business for $1.15bn from Peregrine as part of its quest to control more than 1000 stores.
It added 205 company-owned stores to its portfolio.
Viva is still managing the aftermath of a fire at its Geelong refinery that knocked out key production units and temporarily reduced petrol output to around 60 per cent of normal capacity.
The company said earlier this year it expected to restore output to above 90 per cent once inspections were complete, and has insurance cover for both property damage and business interruption.
But the incident has sharpened focus on the company’s asset base and the earnings leverage it carries in a tight fuel market.
Viva is not the only corporate that may embark on a sale and leaseback.
Endeavour Group is also tipped to be examining options for its property portfolio, understood to be worth around $500m, with Charter Hall well placed to play a role.
Endeavour chief executive Jayne Hrdlicka has flagged an asset-light strategy as central to her transformation of the pubs and liquor giant, which has seen its shares fall more than 50 per cent since its demerger from Woolworths in 2021.
Charter Hall previously acquired ALE Property Group, which leases pub sites back to Endeavour – meaning any further move into Endeavour’s real estate would deepen an already substantial exposure to the operator.
Viva declined to comment.
The company’s shares are up 7.7 per cent this year.
Extracted in full from: https://www.theaustralian.com.au/business/dataroom/charter-hall-circles-as-viva-energy-weighs-petrol-station-selloff/news-story/df7cb6d317c84683d17b041df882e8f8
