Charter Hall Retail acquires two properties
Charter Hall Retail REIT (CQR) announced the acquisition of a shopping centre located in Canberra and a bulky goods retail centre in Adelaide for a total of $69.8 million. The trust said the assets were acquired at an average yield of 9.5% before acquisition costs and would be funded through existing cash reserves and debt capacity following the success of capital management initiatives over the past 18 months.
Charter Hall expects the Manuka Terrace shopping centre and Mile End Homemaker Centre to be accretive to earnings in the first year following acquisition.
CEO, Steven Sewell, said the acquisition is consistent with the trust’s strategy to increase its exposure to the Australian market and also to widen its investment mandate to include a minor proportion of assets in the bulky goods retail class.
“These assets will complement the trust’s existing portfolio of high quality predominantly grocery-anchored shopping centres, providing strong growth prospects for the future,” Mr Sewell said.
“The assets are expected to contribute to future earnings growth for the trust and assist in bridging the gap between the trust’s current unit price and net tangible assets of $0.72.
Mr Sewell added that following settlement of the transaction, which is expected by 31 March 2010, the trust’s weighting to the Australian and New Zealand markets would increase to 57%.
“This portfolio continues to perform well, having delivered strong same property NOI growth of 5.2% in the six months to December 2009,” Mr Sewell said.
As at 1101 AEDT, Charter Hall Retail shares were up 0.5c to 59.5c.
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