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CHARTER HALL GROUP — Capital/Financing Update 2008
Aug 4, 2008
64645_rns_2008-08-04_3dd94e11-5bcd-49e7-8654-a949218e56b6.pdf
Capital/Financing Update
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ASX/MEDIA ANNOUNCEMENT
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CHARTER HALL ANNOUCES FIRST CLOSE OF CORE PLUS RETAIL FUND (CPRF)
Tuesday, 5 August 2008
Charter Hall Group (CHC), one of Australia’s leading property fund managers, is pleased to announce the first close of its $500 million Core Plus Retail Fund (CPRF).
Wholesale investors, including the $60 million subscribed by Charter Hall Umbrella Fund (CHUF) pursuant to its Product Disclosure Statement (PDS), have invested 38% of the $250 million of equity raised for the first close, with the balance retained by the Charter Hall Property Trust (CHPT), the Group’s listed property trust. Subsequent CPRF closes will further reduce the coinvestment by CHPT towards its long term target of 20% of CPRF equity.
CPRF was established as the third Fund in a series of sector specific core plus investment vehicles managed by Charter Hall. CPRF follows the successful establishment of the Core Plus Office Fund (CPOF) in 2006 and the Core Plus Industrial Fund (CPIF) in 2007.
CPRF is an open ended fund with a mandate to acquire and actively manage retail properties throughout Australia and New Zealand. The Fund’s core plus approach targets 70% to 80% in core retail holdings and 20% to 30% in enhanced asset holdings. These enhanced holdings provide opportunities for additional returns via the refurbishment, repositioning, expansion and/or pre leased development of quality assets to be held for the medium to long term.
A three year debt facility of $250 million has been secured for CPRF from National Australia Bank and St George Bank. CPRF has drawn $250 million of equity and $185 million of debt to fund the portfolio which was previously 100% owned by CHPT. The CPRF portfolio has a completion value of $500 million and the debt capacity in the facility will be utilised to fund the payments required over the next 3 years. Initial gearing in CPRF is 42.5%.
CHC has used the proceeds from the effective sell down of CPRF assets to reduce its debt. CHC’s finance facility with NAB has accordingly been resized to $100 million from $350 million and extended to a three year term until July 2011. This transaction reduced CHC’s debt to approximately $50 million (currently representing a gearing ratio of less than 10%) which is fully hedged for 2.7 years at an interest rate of 7.3% (including margins).
The portfolio of investments held by CHPT now comprises co-investments in 5 high quality unlisted property funds with a WALE of 8.7 years, a 100% occupancy level and a strong tenant list, dominated by Telstra, Wesfarmers, Mercer, Woolworths, Coles, Harvey Norman, BHP and Government or related entities.
ASX/MEDIA ANNOUNCEMENT
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The weighted minimum rental increases across the CHPT portfolio average 3.5% pa. Current rents are on average 8% below market levels which provides positive upward market reversion opportunities.
The table and graphic below summarises Charter Hall Group’s $590 million investment portfolio post CPRF’s first close. Note that this includes both the CHPT portfolio and investments by its corresponding stapled entity Charter Hall Limited (CHL).
| Asset | Equity Investment |
|---|---|
| Chullora | $17m |
| CPOF (Office) | $193m |
| CPIF (Industrial) | $58m |
| CPRF (Retail) | $155m |
| 1DPF (Diversified) | $24m |
| CHUF (Diversified) | $50m |
| 2CHOF 4 & 5 (Development) | $12m |
| CIP and Axiom | $46m |
| Other assets | $35m |
| Total | $590m |
1 Diversified Property Fund (DPF)
2 Charter Hall Opportunity Fund 4 & 5 (CHOF 4 & 5)
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----- Start of picture text ----- Other Assets6% 56 Anzac St, Chullora CHPT Investments3%CIP and Axiom CHL Investments8% Other CHPT /CHL InvestmentsCHOFs2%CPOFCHUF33%8%DPF4%CPIFCPRF10%26%----- End of picture text -----
ASX/MEDIA ANNOUNCEMENT
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Charter Hall continues to enjoy wholesale and retail investor support across its unlisted funds. The extent of valuation movements will be outlined in the Full Year Results presentation on the 25 August 2008, however the Group NTA is expected to be no less than $1.18 as at 30 June 2008.
ENDS
For more information contact Charter Hall Group:
David Harrison Jo Stiles Joint Managing Director Marketing & Communications Manager + 61 2 8908 4033 + 61 2 8908 4026 [email protected] [email protected]
About the Charter Hall Group:
Charter Hall Group is a property funds management and development company, based in Sydney with offices in Melbourne, Brisbane, Perth and Auckland. Established in 1991 and listed on the ASX in 2005 as a stapled security under the code CHC, Charter Hall Group combines Charter Hall Limited with Charter Hall Property Trust. The Group currently has funds under management of $3.9 billion. The Charter Hall Group has achieved a solid track record across its activities demonstrating a 10 year history of managing wholesale capital, making it one of Australia’s leading property fund managers. Charter Hall’s success has been underpinned by a highly skilled, incentivised and motivated management team with diverse expertise across property sectors and risk-return profiles. www.charterhall.com.au
Charter Hall Limited
ABN 57 113 531 150
Level 11 | 333 George Street | SYDNEY | NSW 2000 GPO Box 2704 | SYDNEY NSW 2001 Ph: +61 2 8908 4000 | Fax: +61 2 8908 4040 www.charterhall.com.au
Charter Hall Funds Management Limited ABN 31 082 991 786 Sydney Melbourne Brisbane Perth Auckland