Viva Energy REITs Income Growth on Track

VIVA Energy REIT which focus on Petrol Station investments continues to deliver its strategic objectives with the results for FY19 released this week.


  • Distributable Earnings per security 7.18cps up 2.7% HY2018

  • $2.5 billion portfolio 464 high-quality service stations and convenience properties with WACR 5.8%

  • WALE of 12.1 years

  • NTA $2.18 per security (down from $2.20 in December 2018)

  • 33.4% gearing ratio

  • 3.83% Weighted average cost of debt

  • Raised $115.6m of new equity

The REIT has completion acquisitions or is in the process of funding through commitments for $65m of assets in 2019 with a further $120m of assets in the pipeline. The REIT is adding Caltex, 7Eleven, Liberty and Viva brands to its asstes, broadening the mix of tenants.

Market Overview

• Vehicle ownership in Australia grew by 1.7% in 20181

• Diesel vehicle ownership in 2018 now represents 25% of all registered vehicles in Australia, an increase from 19% in 2014

• In 2019 fuel retailers have been impacted by weaker market conditions primarily impacted by rising oil prices.

• Fuel retailers continue to focus on premium fuels and linkage to shop and loyalty programs to drive stronger connection to the customer

• Premium locations with strong brand positioning to capture the growth in convenience sales and expand site profitability are increasingly important beyond fuel only Long-term future of Australian fuel industry landscape

• Changes in the fuel mix of the car park take time. E.g. Branded PULP introduced in the 1990s and now represents 30% of total automotive gasoline sales in 2018

• Growth in pure electric vehicles to be modest, with hybrid vehicles more likely to be successful due to :

  • Relatively small domestic selection of affordable EVs

  • Government policies (subsidies or tax credits) that support the transition; these are typically present in countries where there has been stronger uptake

  • Minimal EV infrastructure rollout, such as fast charging stations

  • Australia’s sparsely populated and spread out geography contributing to “range anxiety”


Viva Energy REIT are on track to deliver FY2019 earnings growth of 3 - 3.75%.

VVR Trading Chart vs ASX200 AREITs

Blue - VVR

Purple - ASX200 AREITs