Australian retail real estate investor Charter Hall Retail REIT (CQR) has bought four hardware retail outlets for A$151m (€85.5m).
The assets, located in country NSW and rural Queensland, are net-leased to hardware retailer Bunnings for up to 10 years. The leases include fixed annual rent reviews ranging from 2.5% to 3.0%.
Charter Hall Retail CEO, Ben Ellis, said: “These acquisitions extend CQR’s net lease position into the hardware sector, which complements CQR’s convenience retail strategy. CQR already owns Bunnings assets adjacent to our existing, highly productive convenience shopping centres.
“This recent move towards investing in net lease hardware assets on stand-alone sites highlights our ambition to continue to grow CQR’s net lease convenience retail portfolio.”
Ellis said all four assets were located in very well-established and growing regional centres – difficult to replicate – and on large land footprints with low site coverage and passing rents assessed to be on average 15%-20% below market levels.
“As with other net lease assets owned by CQR, these investments offer 100% occupancy with minimal capital expenditure requirements.”
The acquisitions had been funded entirely through undrawn and available debt capacity, which provided earnings and internal rate of return accretion for the CQR portfolio, at the start of a compressing cap rate cycle, he added.
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