Adelaide’s Shahin family is looking to cash in on its $1.2bn sale of the OTR petrol station network to fuel giant Viva Energy, testing the property market with a portfolio of sites in its home city.
The family’s Peregrine Corporation retained all the freehold real estate as part of the deal with Viva, and it is now seeking investor interest in three sites backed by long-term leases with a blue chip ASX-listed corporate tenant.
It seems an opportunistic move by one of Adelaide’s wealthiest families, who rarely sell from their vast portfolio of property holdings, which includes luxury homes and office towers in the city, vineyards, development interests and The Bend motorsport park at Tailem Bend.
The three sites include petrol stations at Marryatville and Darlington, and a third at West Croydon that is also home to the city’s first Krispy Kreme store.
Each of the properties are being offered with new long-term leases to Viva, with renewal options extending out more than 50 years – a longer tenure than typically offered with petrol station properties.
Peregrine last tested the appetite of investors in 2021, when it offloaded six of its South Australian OTR sites to APN Funds Management in a $35.5m sale and leaseback deal.
But with a blue chip ASX-listed tenant in Viva in place, a tighter yield would be expected, considering OTR was not widely recognised outside of its home state before the Viva deal, despite holding a dominant position in the South Australian fuel market.
Burgess Rawson, which is managing the sale campaign, expects it to earn the Shahins a $23m-plus windfall from the sale of the three properties, which generate a combined annual income of close to $1.4m.
Peregrine owns the freehold of the majority of the 170 OTR sites across SA, Western Australia, Victoria and NSW.
Peregrine chief financial officer Michael Dodd said “the timing is right to list the assets”, with the proceeds enabling the company to “recycle its capital into other avenues”.
“South Australia’s commercial real estate sector is performing well, with the removal of stamp duty playing a key role in its demand,” he said.
The sell-off comes as the Shahins consider legal action against rival United Petroleum founders Eddie Hirsch and Avi Silver – following revelations the duo were behind an alleged social media smear campaign designed to damage the reputation of the OTR business.
The Marryatville and Darlington sites will be sold at Burgess Rawson’s portfolio auction event at Crown casino in Melbourne on October 30. The West Croydon site is available via an expressions of interest campaign until November 14.
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