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Warrego Highway Travel Centre, QLD. Source: CBRE
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  • APN Convenience Retail REIT (AQR) has spent $24.4 million to acquire two petrol stations sites on a 5.5 per cent average purchase yield
  • Following the completion of the Dubbo site and the settlement of the site in Warrego, AQR’s portfolio will increase to 111 properties valued at $762 million
  • Existing debt capacity will be used to fund the acquisitions, raising the fund’s gearing to 33.6 per cent on a pro forma basis
  • Shares in AQR are trading 0.28 per cent lower at $3.53 at 2:53 pm AEST

APN Convenience Retail REIT (AQR) has spent $24.4 million to acquire two petrol stations sites on a 5.5 per cent average purchase yield while earmarking further aquisitions.

The REIT exchanged contracts to purchase Warrego Highway Travel Centre, Queensland, as well as conditionally exchanged contracts to acquire Dubbo Service Centre, New South Wales.

Warrego Highway Travel Centre is a purpose-built travel centre that opened in 2019 and is fully leased, with main tenants Ampol and Carl’s Jr accounting for 85 per cent of income.

The remaining rent is paid by two local convenience stores.

The weighted average lease expiration (WALE) for the property is 11.5 years and the annual rental growth rate is 2.9 per cent, with settlement expected by October 2021.

CBRE’s Michael Hedger and Joe Tynan negotiated the sale of the Warrego property.

Dubbo Service Centre will be purchased through a fund-through structure and will include a Mobil gas station and a Carl’s Jr restaurant with a drive-through.

Construction has recently begun and is expected to be completed by March 2022.

The selling deal is contingent on both tenants novating their existing lease agreements to the fund, which is now in the works.

AQR fund manager Chris Brockett said the acquisitions reflected the REIT’s “active and disciplined” approach to growing the portfolio with long WALE and average rent reviews providing income security and growth.

“We have a healthy pipeline of identified opportunities and look forward to further leveraging Dexus’s platform to continue to deliver on our strategy of investing in strategically located convenience retail assets that provide investors with an attractive, defensive and growing income stream,” he said.

“These acquisitions build on the momentum of the 7-Eleven Kingston and United Gordonvale acquisitions announced in August, taking AQR’s total acquisitions for FY22 to $53 million.”

Following the completion of the Dubbo site and the settlement of the site in Warrego, AQR’s portfolio will increase to 111 properties valued at $762 million.

This value reflects a weighted average capitalisation rate of 5.9 per cent and a portfolio WALE of 11.8 years.

Existing debt capacity will be used to fund the acquisitions, raising the fund’s gearing to 33.6 per cent on a pro forma basis, which is within its target range of 25 to 40 per cent.

AQR said its previously announced FY22 FFO and dividend guidance of 22.9 cents per share remained unchanged.

Shares in AQR were trading 0.28 per cent lower at $3.53 at 2:53 pm AEST.

AQR by the numbers
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