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APN Convenience Retail REIT Acquires Two New Properties In Queensland And New South Wales

September 28, 2021 – APN Funds Management Limited as responsible entity for APN Convenience Retail REIT has exchanged contracts to acquire Warrego Highway Travel Centre, Queensland (Warrego) and conditionally exchanged contracts to acquire Dubbo Service Centre, New South Wales (Dubbo).

Warrego and Dubbo are well designed convenience retail centres strategically located on main arterial roads with exposure to high traffic flows.

Warrego is a purpose-built travel centre constructed in 2019 and is 100% occupied with 85% of the income securely leased to major tenants Ampol (63% of net income) and Carl’s Jr (21%). The remainder of the rent is derived from two experienced, local convenience retailers. The property’s weighted average lease expiry is 11.5 years, and the average rental growth is 2.9% per annum. Settlement is expected to occur by October 2021.

Dubbo is being acquired via a fund through structure and will comprise a Mobil service station and a Carl’s Jr restaurant with drive through. Construction has recently commenced and is due to complete by March 2022. The sale contract is conditional upon both tenants novating the existing agreement for leases over to the Fund, which is in the process of occurring.

The properties were acquired for a combined price of $24.4 million, representing an average purchase yield of 5.5%.

AQR Fund Manager, Chris Brockett said: “The acquisition of Warrego and Dubbo reflect our active and disciplined approach to growing the portfolio, with the long WALE and average rent reviews providing a high level of income security and sustainable source of income growth.”

“We have a healthy pipeline of identified opportunities and look forward to further leveraging Dexus’s platform to continue to deliver on our strategy of investing in strategically located convenience retail assets that provide investors with an attractive, defensive and growing income stream.”

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