By James Atkinson
Woolworths has announced the sale and leaseback by ALH Group of a portfolio of 54 freehold properties to a Charter Hall Group led consortium for $603 million.
Following expected completion of the transaction in October 2014, ALH Group will retain operational control of the portfolio of hotels, 46 of which also include a Dan Murphy’s and/or BWS retail tenancy, through longâ€term leasehold arrangements.
Woolworths CEO Grant O'Brien said the transaction was consistent with the company’s preference to enter into long-term leases over its premises rather than holding property assets.
“Following completion of this transaction, Woolworths will have divested over $2.8 billion of property assets since 1 July 2010,” he said.
Charter Hall has created a new wholesale partnership – to be known as the Long WALE Investment Partnership (LWIP) – with superannuation fund Hostplus to acquire the properties, subject to initial lease terms of 20 years plus options, reflecting an initial yield of 6.8 per cent.
“ALH’s position as a leading hospitality operator, combined with the long dated CPI linked triple net lease structure, provides attractive investment attributes that align with our primary objective of delivering stable returns to our members,” said Hostplus CEO David Elia.