The Charter Hall Group (ASX: CHC) share price is sinking lower on Tuesday after announcing a new acquisition.
The property company's shares are down a sizeable 5.5% to $13.63 in afternoon trade.
What did Charter Hall announce?
This afternoon Charter Hall revealed that its wholesale partnership, LWHP, has made an acquisition. The LWHP partnership comprises VFMC, Telstra Corporation Ltd (ASX: TLS) Super, and Charter Hall.
According to the release, the partnership has acquired a $353 million portfolio of six Bunnings Warehouse assets located in prime metropolitan markets.
Bunnings Warehouse is Australia's leading hardware retailer and owned by Wesfarmers Ltd (ASX: WES).
The portfolio of modern Bunnings Warehouse retail stores was acquired on a yield of 4.63%. Approximately 85% of the portfolio is located in Sydney, Melbourne and Brisbane. It has a weighted average lease expiry (WALE) of 10 years and 2.5% annual rent reviews.
Charter Hall's Managing Director and CEO, David Harrison, commented: "We are proud to further expand our strong relationship with Wesfarmers and Bunnings Group. Across the Charter Hall platform we now have in excess of $2.4 billion invested in 59 Bunnings stores, 50 of which are located in metropolitan locations."
"This transaction represents our seventh Bunnings portfolio acquired since 2006 when we first recognised the strength of the Bunnings business, the relatively low rents per square metre of lettable area and the large prime sites Bunnings typically occupy," he added.
This sentiment was echoed by LWHP Fund Manager, Ben Ellis. He said: "This off-market acquisition extends the Bunnings relationship, expands our off-market transaction track record and enhances the diversity and breadth of the LWHP partnership which has been one of our most successful partnerships delivering an IRR since inception exceeding 15%."
Despite today's decline, the Charter Hall share price is up 27% over the last 12 months.
