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AQR acquired six OTR stations in May. Source: OTR
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  • APN Convenience Retail REIT (AQR) enjoys a portfolio valuation bump on the back of strong demand for service station and convenience retail assets
  • The revaluation sees its portfolio value rise $41.6 million, or 7.9 per cent
  • The company’s total portfolio comprises 100 properties valued at $624 million
  • AQR enjoys 100 per cent occupancy, and a 12-year weighted average lease expiry
  • Shares in APN Convenience Retail REIT are unchanged, sitting at $3.72 at 10:42 am AEST

APN Convenience Retail REIT (AQR) has enjoyed a portfolio valuation bump on the back of strong demand for service station and convenience retail assets.

The draft valuation sees total portfolio revaluation uplift of $41.6 million, or 7.9 per cent, compared to December 31 2020.

On the back of the revaluation, its portfolio weighted average capitalisation rate tightened by 45 basis points to 6.02 per cent.

As of June 30, 2021, 62 properties were the subject of an independent valuation, whereas all properties had been the subject of an independent value during the previous 12 months.

“The outcome of our valuation process reflects the strong appetite for service station and convenience retail assets, particularly over the past 12 months where transaction volumes have significantly increased due to their non-discretionary and defensive nature,” AQR fund manager Chris Brockett said.

The company’s total portfolio comprises 100 properties valued at $624 million, an increase of $117 million, or 22.3 per cent, from December 31, 2020 including acquisitions and developments completed to June 30, 2021.

The portfolio will consist of 107 properties valued at $709.5 million after settlement of the property portfolio transaction of six 7-Elevens, and completion of the Hillcrest development project, both of which are anticipated to occur in September 2021.

Pro forma Net Tangible Assets (NTA) increased from $3.35 per security at December 31, 2020 to $3.68 per security after accounting for the value boost.

“AQR remains in a healthy position with portfolio occupancy of 100%, a WALE of 12 years and secure cash flows underpinned by strong lease covenants with over 90% of portfolio income expiring in FY30 and beyond providing investors with a long-term sustainable income stream,” Mr Brockett said.

AQR recently acquired six petrol stations for $35.5 million from OTR on a sale and leaseback agreement.

The announcement hasn’t phased the market, with shares APN Convenience Retail REIT unchanged, sitting at $3.72 at 10:42 am AEST.

AQR by the numbers
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