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CHARTER HALL GROUP — Earnings Release 2020
Dec 11, 2019
64645_rns_2019-12-11_3a22b9f1-c55d-4e01-880d-e0f3fd7323b4.pdf
Earnings Release
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ASX Release
BP Portfolio Investment Earnings Guidance Upgrade Distribution for half year ending 31 December 2019
12 December 2019
Charter Hall Retail Management Limited ACN 069 709 468 AFSL 246996 Responsible entity of Charter Hall Retail REIT ABN 34 357 213 849 Level 20, No.1 Martin Place Sydney NSW 2000 GPO Box 2704 Sydney NSW 2001 T +61 2 8651 9000 F +61 2 9221 4655 www.charterhall.com.au
Charter Hall Retail Management Limited, as responsible entity of Charter Hall Retail REIT (ASX:CQR) today announces an investment in a new Charter Hall managed Partnership that has contracted to acquire a 49% interest in a portfolio of 225 Long WALE Convenience Retail properties leased to BP Australia Pty Ltd (BP).
The portfolio consists of the majority of BP’s owned Convenience Retail properties in Australia. The portfolio has a WALE of 20 years, with staggered lease expiries from 18 to 22 years and triple-net structure with annual CPI increases.
The Charter Hall managed Partnership will be owned 30% by Charter Hall Retail REIT, 50% by Charter Hall Long WALE REIT (ASX:CLW) and 20% by Charter Hall Group (ASX:CHC).
Charter Hall Retail REIT’s equity commitment for its 30% interest is approximately $137 million, which will be funded through contracted and planned asset divestments.
In addition to previously disclosed asset sales, a further five assets have been contracted to divest to the value of $117m consisting of four freestanding regionally located assets at Moe, Kyneton, and Bairnsdale in Victoria, Cooma in NSW and Erindale Shopping Centre, ACT. These assets have been contracted at a combined 3.5% premium to 30 June 2019 book values. CQR intends divesting a further $100 million approximately of non core assets in an orderly divestment program to maintain portfolio gearing in the middle of the target 30-40% range.
Charter Hall Retail CEO, Greg Chubb said: “This is a portfolio enhancing acquisition which extends CQR’s position as the leading owner and manager of convenience-based retail assets. The BP portfolio provides a stable and secure growing income stream with annual CPI increases and a very efficient triple-net lease structure. This acquisition is an appropriate long WALE low risk recycling opportunity for the proceeds of our non core divestment program”
Portfolio Impact
The pro-forma impact of today’s acquisition and announced divestments is that BP Australia will become the fourth largest tenant customer for CQR representing 6.3%[1] of rental income. The total portfolio WALE increases from 6.5 years to 7.2 years and major tenants WALE from 10.4 years to 11.5 years.
Gearing is expected to be within the middle of the 30-40% policy range post settlement of the BP portfolio acquisition and contracted and planned divestments.
1 Ownership basis prior to further planned divestments
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Distribution for the half year ended 31 December 2019
CQR today also declares a distribution of 14.52 cents per unit (cpu) for the half year ending 31 December 2019. This represents a 1.7% increase on 1H FY19 distribution per security of 14.28cpu. The Distribution Reinvestment Plan (DRP) will also be active for this period.
FY20 Earnings Guidance Upgrade
As a result of today’s announcement, CQR is pleased to increase it’s FY20 earnings guidance from 1.7%-2.0% operating earnings growth per unit over FY19 to 2.2% operating earnings growth per unit.
Barring unforeseen events, this guidance reflects the positive impact of today’s acquisition and already announced and future divestments subject to the timing of acquisitions and divestments. The distribution payout ratio is expected to be between 90 – 95% of operating earnings.
Announcement approved by the Board
Charter Hall Retail REIT (ASX: CQR)
Charter Hall Retail REIT is a leading owner and manager of a portfolio of high quality convenience based retail.
Charter Hall Retail REIT is managed by Charter Hall Group (ASX:CHC). With over 28 years’ experience in property investment and funds management, we’re one of Australia’s leading fully integrated property groups. We use our property expertise to access, deploy, manage and invest equity across our core sectors – office, retail, industrial and social infrastructure.
Operating with prudence, Charter Hall Group as Manager of CQR has carefully curated a $38 billion diverse portfolio of over 1100 high quality, long leased properties. Partnership and financial discipline are at the heart of our approach. Acting in the best interest of customers and communities, we combine insight and inventiveness to unlock hidden value. Taking a long term view, our $6.5 billion development pipeline delivers sustainable, technologically enabled projects for our customers.
The impacts of what we do are far-reaching. From helping businesses succeed by supporting their evolving workplace needs, to providing investors with superior returns for a better retirement, we’re powered by the drive to go further.
| For further enquiries, please contact | |
|---|---|
| Greg Chubb | Christine Kelly |
| Retail CEO | Deputy Fund Manager CQR and Head of Retail Finance |
| Charter Hall Retail REIT | Charter Hall Retail REIT |
| T +61 2 8651 9355 | T +61 2 8651 9401 |
| [email protected] | [email protected] |
| For media enquiries, please contact | For investor enquiries, please contact |
| Adrian Harrington | Philip Cheetham |
| Head of Capital and Product Development | Head of Listed Investor Relations |
| Charter Hall | Charter Hall |
| T +61 410 489 072 | T +61 403 839 155 |
| [email protected] | [email protected] |
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