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Service station operator APN Convenience REIT (ASX: AQR) is poised to expand its portfolio of properties with a proposed $75 spending spree.
The group will acquire 13 service stations and convenience retail properties in South Australia, Western Australia, Queensland and the Northern Territory for a total consideration of $74.6 million.
The portfolio of sites to be acquired by AQR includes 10 brand new or under construction sites, plus two established sites leased to operators including 7-Eleven, Viva Energy, BP, Liberty, Mobil, Hungry Jacks, and KFC.
In order to make the acquisition AQR has announced a fully underwritten institutional placement to raise approximately $38 million at an issue price of $3.39 per security.
The remaining costs will be funded with bank debt.
In conjunction with the raise for the acquisition AQR will undertake a non-underwritten security purchase plan to shareholders to raise $5 million to repay debt and support the company's core business activities.
Of the 10 brand-new sites, three are expected to be completed by the end of 2019, and seven are to be completed between April and July 2020.
Following the proposed acquisition APN Convenience REIT will have 81 assets in its portfolio worth $428.1 million in total.
The company already boasts 100 per cent occupancy in each of its 68 currently operating service stations, and this is expected to continue post-acquisition.
APN Convenience REIT fund manager Chris Brockett says the acquisition will greatly enhance the group's portfolio.
"The acquisitions provide AQR an outstanding opportunity to acquire a portfolio of newly built and well-located assets, enhancing AQR's overall tenant and geographic diversification," says Brockett.
"The acquisitions provide the opportunity to enter into locations not currently represented within the portfolio as well as introducing three new, high quality tenants including Liberty, BP and a major independent operator whose business has received global recognition for their convenience store strategy."
The impact of the acquisitions are expected to be accretive to FY21 earnings.
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