APN pays Denmac $27.5m for three Queensland service stations

Denmac Nominees has sold three near-new Queensland service stations to APN Convenience Retail REIT (AQR) for a total of $27.5 million.

The blended yield for Brisbane’s Coles Express Acacia Ridge and Coles Express Moorooka (pictured, top), and Coles Express Cairns, in the state’s far north, is 6.3 per cent.

Almost two thirds of the portfolio’s income is paid by Viva Energy Australia, some 10pc by Krispy Crème and Karcher, with the balance by Gloria Jeans and smaller tenants.

The acquisitions – announced by AQR on August 14 – boost the landlord’s portfolio to 83 assets valued at a total of $483m.

In June, the fund paid $10.5m for the Ampol-backed Brisbane Airport Link Service Centre.

Well placed to pursue further acquisitions: AQR

Brisbane based Denmac, established by Denis McEnjery and now run by his grandson William Griffin, develops and repositions assets (story continues below).

It built the three convenience outlets trading to AQR over 18 months from mid-2016.

The portfolio has a weighted average lease expiry of 9.9 years (the trust’s WALE, according to its 2020 annual report, was also long – 10.6 yrs).

CBRE marketing agents Michael Hedger and Joe Tynan said fuel and convenience based retail investments are continuing to be highly sought “due to their annuity style income streams, which offered income growth and were underpinned by…strong lease covenants” and pricing “is expected to be more resilient to economic challenges, underpinned by the shortage of well-located premium grade investments available in the market and the significant number of new private and institutional mandates”.

AQR fund manager Chris Brocket added its three new Queensland 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”.

In its last financial report, the fund said it is 16.5pc geared – and set to reap 2.8pc in contracted annual rental growth.

“With a strong balance sheet, we are well placed to pursue further acquisition opportunities while maintaining a prudent level of gearing,” the executive said following upon announcing its Acacia Ridge, Moorooka and Cairns deals.

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Marc Pallisco

A former property analyst and journalist, Marc is the publisher of realestatesource.com.au.

Marc Pallisco