Charter Hall Group announced that its new fund has agreed to acquire a 49% interest in a NZ $534 million portfolio of 70 triple net leased (NNN), Long WALE convenience retail properties leased to BP in New Zealand.
According to a statement by the company, the Charter Hall managed fund will be owned 50% by Charter Hall Long WALE REIT (ASX:CLW) and 50% by Charter Hall Retail REIT and there will be no debt facility at the JV fund level. The acquisition price of CLW and CQR’s combined 49% interest in the portfolio is approximately NZD $262 million and represents a 6.25% initial yield.
Charter Hall Retail REIT’s funding commitment for its 50% interest is approximately NZD $130.8 million. CQR will utilise available borrowing capacity denominated in NZD to fund the transaction.
The portfolio, consisting of the majority of BP’s owned convenience retail properties in New Zealand, has been acquired in a sale and leaseback transaction and will have a 20-year WALE at acquisition with initial lease terms of properties in the portfolio ranging from 18 to 22 years.
The portfolio is geographically diversified with 78% of the portfolio in metropolitan locations and 72% located in New Zealand’s top 3 cities, with Auckland representing 51% of the portfolio value.
Managing Director and Group CEO David Harrison said: “This off market transaction further extends our relationship with BP, builds upon the success of our Australian Partnership and demonstrates our conviction in NNN leased Long WALE convenience retail.”
“We are delighted to further our existing relationship with BP and partner with them in New Zealand. This investment is consistent with our strategy of partnering with major convenience retailers to meet their property needs and provide CQR unitholders with a resilient and growing income stream,” said Greg Chubb Charter Hall Retail CEO.
Last year Charter Hall Group has agreed to acquire a 49% interest for A$840 million in a $1.7 billion portfolio comprising 225 Convenience Retail properties leased to BP Australia Pty Limited (BP) with a 20-year WALE triple net lease.