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Charter Hall (ASX: CHC) has proven to be one of the most acquisitive property funds on the ASX this year and is finishing 2019 with a bang.
The company today announced $1.25 billion of acquisitions have been secured, of which two thirds involves a new partnership to partially own 225 convenience properties leased to BP.
CHC is not alone in seeing the potential of these kinds of assets, with the decision coming hot on the heels of Caltex Australia (ASX: CTX) announcing an IPO to own the properties it leases.
Charter Hall will invest $840 million in a new managed partnership that will acquire a 49 per cent stake in a $1.7 billion portfolio of convenience properties with a 20-year weighted average lease expiry (WALE).
And like another fund Centuria Industrial REIT (ASX: CIP), Charter Hall appears to be capitalising on an apparent sell-off of assets from iconic Australian biscuit maker Arnott's.
CHC will fork out $398.9 million on an Arnott's industrial facility in the Sydney western suburb of Huntingwood, which has a 32-year WALE. This follow's yesterday's sale of two Arnott's factories in Queensland and South Australia to Centuria for $236 million.
Charter Hall's stake in the BP-leased assets will be divided between its funds CLW (50 per cent), CQR (30%) and the group itself (20 per cent).
Charter Hall's equity commitment for its 20 per cent interest is approximately $90 million, which will be funded through existing investment capacity.
CLW will undertake an underwritten $350 million equity raising today to help fund its involvement in the deal.
"We welcome the establishment of these significant tenant customer relationships with BP and Arnott's," says Charter Hall managing director and group CEO David Harrison.
"Our success in partnering with Global multi-national and Australian-based corporates in sale and leaseback activities continues to benefit our tenant customers while providing opportunities for our diverse range of investors and securityholders.
"The creation of this Partnership continues Charter Hall's growth of new partnerships and funds, whilst further extending the Group's long WALE investment strategy."
CHC has also given its earnings guidance a boost, up from 18-20 per cent year-on-year growth to 30 per cent, based on its significant acquisition activity and funds under management (FUM) growth to beyond $38 billion.
Key acquisitions in the second half of the year include deals for Chifley Tower, a joint stake in 201 Elizabeth Street Sydney and a major stake in Telstra properties, as well as a trio of properties in Melbourne, Sydney and Darwin.
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