Charter Hall Group establishes $700 million core plus industrial fund (CPIF)

Charter Hall Group announces that as at the first close of the Core Plus Industrial Fund (CPIF) capital raising, $350 million of equity commitments have been received, including Charter Hall Property Trust's co investment commitment. With 50 percent gearing, CPIF has $700 million of asset value capacity.

CPIF has a further $450 million of asset acquisition capacity in addition to the $248 million seed portfolio already secured, comprising six assets throughout Australia. CPIF has capacity to invest up to 20 percent of the fund in New Zealand.

Charter Hall also announces that CPIF has contracted to acquire its sixth asset being 123 Kewdale Road, Kewdale for $31.88 million. Kewdale is one of Perth's premier industrial precincts, situated 8 kilometers north east of Perth CBD. 123 Kewdale Road is a former Woolworths distribution centre comprising approx 31,000m2 of lettable area, which has recently been refurbished and leased to Myer Group and SCT Logistics, with Woolworths recommitting to the office space.

The Kewdale property has been acquired from Luke Saraceni's Saracen Property Group and negotiated off market by Savills agents Miles Rowe and Paul Craig.

The property is anchored by a 12 year lease to Myer with all tenancies providing fixed annual increases of between 3.75 percent and 4 percent and opportunities to benefit from market reviews over the next four years.

The key features of the CPIF seed portfolio of $248 million include:

• Average lease term to expiry (WALE) of 14.7 years
• Tenants including Coles Group, Toll Holdings, Myer Group, Woolworths, Katmandu, Caterpillar, Primus, TJM, Hagemyer and Wesfarmers subsidiary, Protector Alsafe.
• Geographic spread within key industrial suburbs of Brisbane, Melbourne and Perth.

Joint Managing Director David Harrison noted that, "our Core Plus funds provide for a 70/30 percent spread between core/stablised assets and enhanced assets, which provides the opportunity for CPIF to target a broader spectrum of assets than a Core only or Enhanced only fund. This provides even greater market penetration and scope to outperform performance hurdles".

Other wholesale funds managed by Charter Hall include:

• four opportunity funds that have raised $434 million of equity, which have or will deliver $1.5 billion of assets;
• $1 billion asset value Core Plus Office Fund (CPOF) which has been 73 percent committed;
• $700 million (asset capacity) CPIF.

Mr Harrison advises, "the CPIF portfolio has an excellent blend of fixed annual increases and market reviews over the medium term, which gives us confidence that the CPIF targeted returns may be exceeded. It is also pleasing to see that 93 percent of CPIF assets by value have been secured off market using our deep industry relationships".

Wholesale Funds Director Nick Kelly further commented, "CPIF has attracted seven new investors which combined with repeat investors whom have supported other CHC funds, means that Charter Hall now boasts some 30 different wholesale investors across our suite of wholesale funds".