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- APN Convenience Retail REIT (AQR) has announced it is seeking to raise $45 million in an institutional placement and $5 million in a security purchase plan
- The raise will go towards the acquisition of two service station properties in Gordonvale and Kingston, Queensland, for $28.6 million
- For the fiscal year ending June 30, 2021, the fund had a statutory profit of $73.8 million with funds from operations (FFO) climbing 34.6 per cent
- The portfolio is 99.6 per cent occupied, with a weighted average lease expiry (WALE) of 11.9 years
- Shares in AQR are sitting at $3.72 in a trading halt
APN Convenience Retail REIT (AQR) has announced it is seeking to raise $45 million in an institutional placement and $5 million in a security purchase plan to fund two acquisitions in Queensland.
The two properties in Gordonvale and Kingston represent a 5.77 per cent initial yield with a purchase price of $28.6 million.
The equity raise will fund the acquisitions and associated transaction costs while repaying debt to support the fund’s core business activities.
MA Moelis Australia is underwriting the institutional placement and will be issued at $3.60 per new security, a 3.2 per cent discount on the last closing price.
Eligible security holders in Australia and New Zealand can subscribe for up to $30,000 in new shares via a fully underwritten SSP for $5 million, with new shares to be issued at $3.60.
The recent equity raising comes off the back of $47.4 million in fresh capital raised in FY21.
FY21 Results
For FY21, AQR had a statutory profit of $73.8 million with funds from operations (FFO) climbing 34.6 per cent to $25.9 million.
The rise in FFO was primarily due to an increase in net property income, which was fueled by 2.8 per cent like-for-like property rental growth and the contribution from acquisitions and development projects completed during the year.
Due to the issue of new securities throughout the year, an FFO of 21.9 cents per security represents a 1.4 per cent increase over FY20.
Fund manager Chris Brockett said it has been a solid year of results.
AQR had contracted to acquire $185 million of property in FY21 and recently contracted a further $28.6 million, which Mr Brockett said positioned the fund to deliver a 4.6 per cent increase in distributions in FY22, after allowing for the impact of the proposed acquisitions and offer.
The portfolio is 99.6 per cent occupied, with a weighted average lease expiry of 11.9 years and 94 per cent of rental income coming from major service station tenants.
The portfolio had 98 properties as of June 30 2021, with the total portfolio value growing by $184.5 million, or 41.2 per cent, over the year. A total of $130.6 million in completed acquisitions and developments, as well as a $53.9 million revaluation uplift, contributed to the rise.
On October 1, AQR will transition to Dexus Convenience Retail REIT and the ticker code will be DXC under the Dexus’ acquisition of APN Property Group in August.
The fund expects FY22 FFO and distribution guidance of 22.9 cents per security, up 4.6 per cent from FY21, after accounting for the impact of the acquisitions and equity raising.
Shares in AQR are sitting at $3.72 in a trading halt.
