Singapore’s GIC has stepped up its investment in Australia as it backs Charter Hall Group in the purchase of a 49% stake in 250 service stations/convenience stores, operated under the Caltex brand, for around A$1bn (€610m).
IPE Real Assets understands that a Charter Hall fund, most likely the listed Charter Hall Retail Fund (CQR), will co-invest with GIC in the portfolio of Caltex service stations. A source said these assets were best suited to a retail trust.
CQR currently manages a A$4bn convenience-based Australian retail portfolio. Among its assets is a 30% stake in a portfolio of 225 convenience stores and service stations leased to BP. Last December, CQR and its sister trust, Charter Hall Long WALE REIT, partnered with their manager, Charter Hall, in the purchase of a 49% stake in the BP service stations for A$840m.
Charter Hall topped up its interest with an additional 17.5% stake, purchased in February this year for at least A$147m. Like the BP service stations, which are leased back to BP for 25 years, the sale-and-leaseback deal with Ampol, formerly Caltex, will come with long-dated leases.
Charter Hall is reported to have been courting Caltex, which is rebranding in Australia as Ampol, to buy into the service station portfolio for more than a year, but price was the sticking point.
The situation was complicated when Canada’s Alimentation Couche-Tard made a takeover offer for the fuel refiner and retailer, before deciding not to pursue the deal when COVID-19 hit.
Investment banking sources said the final offer for the Caltex assets was a price that would equate to a yield of between 5.3% and 5.5%. Charter Hall purchased the BP stations at a price reflecting a 5.5% yield.
GIC has recently been acquiring small neighbourhood convenience shopping centres in Australia through Perth-based Primewest. It has also mandated Charter Hall to seek out other suitable Investments in Australia, resulting in a string of transactions.
Most recent of these was the purchase of an office building with retail, known as the Jessie Street Centre, in Parramatta, the key business centre of Sydney’s western suburbs. GIC and Charter Hall acquired the assets from Brookfield for A$450m. GIC’s relationship with Charter Hall goes back 15 years.