Charter Hall revs up petrol station market with $840 million BP deal

Simon Johanson
December 12, 2019

The Age

Global fuel giant BP has followed in the footsteps of rival Caltex and sold a half share of its local petrol station portfolio to listed property fund manager Charter Hall.

Global fuel giant BP has followed in the footsteps of rival Caltex and sold a half share of its $1.7 billion petrol station portfolio to listed property company Charter Hall.

BP Australia has agreed to a deal with Charter Hall and two of its funds that will give them a 49 per cent stake in 225 of its convenience and fuel outlets for $840 million.

The service station deal comes as Charter Hall, one of the country’s largest and busiest property fund managers, announced it has also swooped on biscuit brand Arnott’s factory in Huntingwood, in Sydney’s western suburbs, signing a $398.9 million sale and leaseback transaction with the food manufacturer.

Australia’s fuel and convenience retail sector has dominated year-end commercial real estate activity, with multiple petrol stations selling and proposed portfolio spin-offs into platform funds.

Caltex, which in the midst of navigating an $8.6 billion takeover bid from Canadian convenience giant Alimentation Couche-Tard, is sampling investor interest in the float of a half stake in 250 of its service stations around Australia, forming a $1.1 billion listed property trust.

The fuel retailer also last week signed off on a deal to sell 25 mainly inner-city, high-value petrol station sites for $136 million. The stores were snapped up by Woolworths, which took 10, and Melbourne-based fund manager Oliver Hume, with 12 to be redeveloped.

Charter Hall said it will purchase the half share in BP’s petrol stations in partnership with two of its managed funds, the Charter Hall Long WALE REIT and the Charter Hall Retail REIT.

The group’s Long WALE will control 50 per cent of the partnership and immediately announced it will tap investors with a $350 million equity raising to help fund the purchase.

Charter Hall’s Retail REIT will take a 30 per cent share in BP’s portfolio, funding the $137 million acquisition through asset sales.

BP’s convenience and fuel outlets have a 20-year weighted average lease expiry on triple-net leases with annual CPI rent increases built in.