Retail property landlord APN Convenience Retail REIT (ASX:AQR)
has sealed a takeover and leaseback deal with On the Run for six retail sites in South Australia.
The $35.5 million purchase has lifted the company’s total spending on its FY21 acquisition pipeline to $176 million. The 450.5 million property player will will finance the purchase with its debt facilities.
The acquisition has added six new assets in Naracoorte, Gepps Cross, Glenunga, Kapunda, West Beach and Murray Bridge Eastside, to APN’s existing portfolio of eighty eight convenience retail sites.
Under the agreement, the vendor will remain as the occupant of the venues as a new tenant with lease terms of twenty years. These rental contracts have fixed annual rent reviews of 2.75 per cent. These tenancy contracts will contribute 5 per cent of APN’s total rental revenue.
APN emphasised the quality of its newly earned customer, “We are very pleased with the acquisition of this portfolio. OTR is an experienced and strong performing convenience retail operator which brings together a number of retail brands and unique retailing skills into a successful, innovative, multi-branded convenience offer, with a proven track record of growth, profitability and scalability.
The owner-turned tenant currently has access to high-profile hospitality retail franchises, such as Subway, Krispy Kreme , Oporto, Hungry Jacks, and Guzman Y Gomez.
The real estate settlement is expected to be completed by the end of the financial year.
Shares in APN Convenience Retail REIT are trading 0.3 per cent higher at $3.66