Charter Hall pays BP $840 million for 49 per cent stake in 225 service stations

Charter Hall (CHC) is paying petroleum giant BP Australia Pty Limited $840 million for a 49 per cent stake in 225 convenience retail assets.

The $1.7 billion portfolio consists of the majority of BP’s owned investments of this type, nationally.

It has a weighted average lease expiry (WALE) of 20 years (most of the rental agreements will come up for renewal in between 18 and 22 years).

The leases are also triple-net, with fixed CPI increases.

The Charter Hall managed partnership will be 50 per cent owned by the Charter Hall Long WALE REIT (CLW) and 30 per cent controlled by the Charter Hall Retail REIT (CQR).

Charter Hall Group will retain the balance – its 20 per cent interest, worth about $90 million, to be funded through existing investment capacity.

CLW’s WALE increases to 14.9 years after deals announced today

Today we reported CLW has spent $198.9 million to acquire a half-share of the Arnott’s Huntingwood factory, 35 kilometres west of the Sydney CBD.

Factoring settlement of that property, and the BP portfolio – all sale and leaseback investments – CLW’s WALE grows to 14.9 years.

“We welcome the establishment of these significant tenant customer relationships with BP and Arnott’s,” Charter Hall managing director and group chief executive officer David Harrison said.

“Our success in partnering with global multi-national and Australian-based corporates in sale and leaseback activities continues to benefit our tenant customers while providing opportunities for our diverse range of investors and security holders”.

The creation of this Partnership continues Charter Hall’s growth of new partnerships and funds, whilst further extending the Group’s long WALE investment strategy, the executive added.

Service stations in the news

On Monday we reported that Caltex offloaded 25 service stations to a combination of five buyers (Woolworths amongst them) – for a total of $136 million.

Caltex must pay to remediate all the sites and hand them over vacant, and ready for development, in 24 months.

Following those costs, and taxes, the vendor expects to pocket about $92 million from that sell-down.

Next year it will offer 25 more service stations as building blocks.

In October, we reported that the Withers family, which own 7-Eleven’s Australia franchise, banked $77.9 million disposing of 15 service stations on a leaseback.

This portfolio sale came five years after the Withers’ sold another 15 7-Eleven leased assets in one hit for a total of $71.1 million.

A portfolio of 15 7-Eleven outlets, offered as sale and leaseback investments, traded for $77.9 million in October.

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Marc Pallisco

A freelance property analyst and journalist, Marc is a co-founder of realestatesource.com.au.

Marc Pallisco