HUNDREDS of Coles petrol stations will hit the stock market next month as Dutch property and fuel business Vitol offers shares in its $1.5 billion real estate investment trust.

The float of Vitol’s Viva Energy Real Estate Investment Trust (REIT) and its raising of $911 million will be the second biggest listing in Australia this year.

Viva Energy REIT opens with 425 freehold service station sites that are leased to Vitol subsidiary, Viva Energy. All sites operate under an agreement between Viva and Coles Express.

The share price of $2.20 gives the REIT a market capitalisation of $1.5 billion which analysts said represents a yield of 5.94 per cent.

Coles and Viva entered the agreement in 2013 to lease the sites as Shell/Coles Express until 2024. The agreement said Viva would deliver the fuel and maintain the properties.

But Coles challenged Viva’s plans to list its properties because it was concerned about its lease arrangements. The matter went to court where Coles lost.

After the court hearing, Coles said it remained committed to the partnership with Viva, strengthening the future of the REIT.

However, some analysts warn that the future of service stations could be affected by the growth in alternative-fuel vehicles and particularly electric vehicles (EVs).

Viva’s interest in owning the service stations is attractive because of the high traffic volume and the Coles alliance that makes each station a mini-supermarket.

Viva owner Vitol last year paid $3 billion for Shell Australia’s businesses including the Geelong Refinery and 870 retail service stations, of which about 620 stations are leased by Coles Express. Only 425 of those sites form part of the REIT.

By Neil Dowling