Charter Hall seen offering ‘knock-out’ price in Caltex deal

The understanding this time around with the Caltex assets is that the portfolio is of better quality, despite the looming transaction happening in weaker macro-economic environment. Picture: Dean Asher

Charter Hall is expected to defy perceptions that the COVID-19-affected market is gun shy when it comes to transactions, with the $4.8bn real estate manager said to be shaping up to offer a knock out price to Caltex for its petrol station property portfolio.

Sources in the market say that the Australian listed real estate fund manager that is closing in on a half share of the $2bn-plus portfolio is believed to be offering a price that equates to a yield of between 5.3 per cent and 5.4 per cent.

Late last year, Charter Hall purchased a similar portfolio of BP petrol stations, paying a price that reflected a 5.5 per cent yield.

At that time, the price was thought to be steep.

The understanding this time around with the Caltex assets is that the portfolio is of better quality, despite the looming transaction happening in weaker macro-economic environment.

The synergies that Charter Hall has with the existing BP assets positions it to pay up for the sites of the service stations.

Charter Hall is not anticipated to raise equity to fund the acquisition, but will instead call on its major investment partners, which are typically large superannuation funds and other institutions.

The plans for the sale of the Caltex portfolio come after Canada’s Alimentation Couche-Tard abandoned a takeover of the fuel refiner and retailer due to the COVID-19 pandemic.

As DataRoom reported in 2018, Charter Hall was in talks about buying stakes in the Caltex assets before they were placed on the market that year by UBS and was always seen as being in the box seat to secure them when the official process was launched.

The problem has been that Caltex at that time shelved a decision to sell down a stake in the portfolio, but then once again announced last year that the real estate would be spun off and floated.

This was just before Caltex, which last month officially changed its name to Ampol, became a takeover target.

At that time, Caltex said it planned to ­embark on a $1bn property float made up of a half-stake in 250 of its retail sites.

Now that Alimentation Couche-Tard is not in pursuit, the sale plans are said to be well advanced.

The company announced last week it had purchased the Aldi logistics assets in Sydney, Melbourne and Brisbane for $648m in a deal with Allianz Real Estate.

The acquisitions of late have been part of Charter Hall’s aspirations to manage more than $40bn worth of real estate and have included the acquisition of an Arnott’s Biscuits factory in Sydney’s west for $398.9m.

It last year paid $840m to buy a 49 per cent stake in 225 convenience retail properties leased to BP for 20 years on average, to be owned across its different funds.

Last month, Charter Hall’s listed satellite, the Charter Hall Long WALE REIT, told the market that it was not planning to raise equity, despite talk in the market a raise could be on the cards.

Already, Charter Hall’s listed satellite Charter Hall Retail REIT has raised $300m and the Charter Hall Social Infrastructure REIT $115m.