CHARTER HALL REIT SNATCH COLES FREEHOLD FOR TOP-DOLLAR $22m

In Property by Clyde Mooney

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Charter Hall’s ASX-listed Long WALE REIT has emerged as the buyer of the prominent Coles-tenanted Club Hotel Waterford for a record-setting $22 million.

The Club Hotel is around 27 kilometres south of the Brisbane CBD, set on a prominent 11,000sqm corner to two main arterial roads, with a sports bar, gaming room with 45 EGMs ranked Top-50 in the State, a First-Choice liquor barn, and three detached bottle shops.

The freehold interest was marketed for Waterford West P/L by CBRE Hotels’ Paul Fraser and Wayne Bunz, boasting a new 15-year lease to Coles subsidiary Liquorland, with its portfolio of 89 pubs, and a mandated $1.25m refurbishment.

“We were delighted with the outcome and very impressed with CBRE’s management of the process, which generated significant investor interest,” offered Waterford West’s Richard Pegum.

The $22 million sale price represents a very sharp ROI for Charter Hall Long WALE (ASX: CLW), furthering its exposure to long-leased hospitality and retail liquor assets with strong tenant covenants.

“We are pleased to extend our relationship with both ALH and Coles, both very high quality tenant covenants in the hospitality sector and throughout our $1.5 billion portfolio, whilst also extending the portfolio WALE,” stated CLW Fund Manager Avi Anger.

“The REIT continues to focus on actively managing the portfolio by deploying capital from recent transactions into well located assets that target both income and capital growth, via an exposure to a high quality portfolio of long WALE properties.”

Despite increasing potential for a rise in the cost of debt, the agents report strong interest in the asset and a sale price heavily reflective of the limited stock of this type available.

“In a sign of the continued strength of the hotel sector, the sale of the property was transacted at a yield of 5.68 per cent – a new record for a freehold pub investment in Queensland,” explained Fraser.

“The new double net lease has an initial 15-year term with three options of ten years, ensuring a long term, secure investment opportunity.”