APN Funds Management has acquired another six service station for its Convenience Retail REIT (AQR).
The South Australian properties were sold with a leaseback to On The Run (OTR), a subsidiary of Peregrine Corporation – the country’s ninth biggest private company.
The portfolio’s price – $35.5m – reflects a blended 5.9 per cent yield.
Two weeks ago, we reported the manager spent $59m on a half dozen Queensland investments, also for the trust.
Last September it paid $27.5m for another three convenience assets in that state.
APN is presently a takeover target for Dexus.
Adelaide based OTR operates about 170 facilities – also in New South Wales, Victoria and Western Australia.
The SA portfolio
AQR’s newest properties, in Gepps Cross (51 Grand Junction Road), Glenunga (303 Glen Osmond Rd), Kapunda (1 Mildred Street, pictured top), Naracoorte (1 Deviation Rd), Murray Bridge Eastside (61-65 Old Princes Highway) and West Beach (89 Military St), were offered with a 20 year lease.
The agreements allow for fixed 2.75 pc rent rises.
“We are very pleased with the acquisition of this portfolio,” the fund’s Chris Brockett said.
“OTR is an experienced and strong performing convenience retail operator which brings together a number of retail brands and unique retailing skills into a successful, innovative, multi-branded convenience offer, with a proven track record of growth, profitability and scalability,” he added.
“it is great to introduce another high-quality tenant in OTR to the fund’s tenancy mix, which will represent approximately five per cent of the [trusts] total rental income on completion”.
AQR has spent $176m this financial year.
Including the latest service stations, the fund’s portfolio comprises 103 assets and is worth $655m.
Its Weighted Average Lease Expiry is 12.2 years.