Billions of dollars worth of Australian petrol stations and industrial parks are headed for sharemarket floats in Australia and Singapore as a tide of capital chases real estate assets that provide investors with healthy yields in a low-return world.
Local investors are gearing up for the launch of a roadshow by gas giant Viva Energy, which plans to list a property fund holding about $2 billion of service stations. Supermarket giant Coles recently dropped legal action that could have delayed the launch of one of the largest Australian real estate investment trust floats in years.
Viva’s non-deal roadshow will showcase the 425-service station portfolio, with investors clamouring for stakes in the $1.3bn vehicle being marketed by Deutsche Bank and Bank of America Merrill Lynch. The group is not alone, with Victoria-based petrol retailer United Petroleum also dusting off plans to float as a $1bn company.
Folkestone Maxim Asset Management managing director Winston Sammut said there was plenty of money around for new floats but cautioned the A-REIT sector was trading at levels that were “a bit toppy”. “If it doesn’t have a good story, good assets and sound fundamentals, I think it’s going to be difficult,” he said.
Viva is seeking to appeal to traditional property investors, as well as superannuation funds, which are now priced out of the direct market by aggressive foreign buying.
The float is being pitched as providing exposure to a growing empire of Coles-branded petrol stations that carry long-term leases, but investors are demanding certainty around the covenant that is offered.
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