Charter Hall Retail REIT Sale of Polish Assets
Charter Hall Retail REIT (ASX:CQR) (the 'REIT') today announced that it has entered into a conditional contract for the sale of its five Polish assets for a gross sale price of €174.5 million, a 4.6% reduction from the December 2012 book value.
The sale will realise net proceeds of approximately A$60 million1 which will be reinvested into Australian acquisition opportunities and used to reduce the REIT‟s average interest rate swap rate in FY14. The sale is conditional on execution of the purchaser‟s Credit Committee approved loan facility and other conditions customary for a Polish portfolio of this value, and is expected to settle by 30 September 2013.
The key benefits of this transaction include:
- Reduction of the REIT's offshore exposure with the core Australian investment portfolio of neighbourhood and sub-regional shopping centres forecast to represent 97% of the REIT's net tangible assets following settlement of this transaction2
- Reduction in the REIT's look through gearing by 6.2% and repayment of a €125.83 million property level debt facility, maturing July 2014
- When combined with current Australian redeployment opportunities this transaction is expected to be neutral to pro forma FY13 operating earnings4.
The REIT's Fund Manager Scott Dundas said: “We are pleased to have contracted to sell the Polish portfolio in line with our Australian focused strategy and our stated sale timetable of June 2013. On completion of the sale, 97% of the REIT's net tangible assets will be located in the Australian market, with the REIT's offshore portfolio comprising two assets in Germany, three small assets in the United States and two small assets in New Zealand.
“We anticipate that the balance of the offshore portfolio will be sold during FY14 in line with our previously stated strategy,” Mr Dundas added.
1 Proceeds hedged through foreign exchange contracts (AUD/EUR average exchange rate of 0.68) and Multi-currency facility drawn debt of €17.7 million (current spot AUD/EUR exchange rate of 0.70)
2 Based on 31 December 2012 balance sheet adjusted for sale of US Regency JV and Polish properties
3 Forecast debt balance at 30 September 2013
4 Based on pro forma FY13 operating earnings adjusted for nine month impact of sale of Polish properties with proceeds from the sale redeployed into an Australian interest rate swap restructure and acquisition of Australian properties
For further information, please contact:
Charter Hall Retail REIT
T: +61 8295 1009
General Manager Finance
Charter Hall Retail REIT
T: +61 8295 1023
Head of Listed Investor Relations
T: +61 2 8295 1016
Head of Marketing and Communications
T: +61 2 8908 4093
About Charter Hall Retail REIT:
Charter Hall Retail REIT is a leading listed real estate investment trust with a portfolio of predominantly Australian high quality supermarket anchored neighbourhood and sub-regional shopping centres.
Charter Hall Retail REIT is managed by Charter Hall Group (ASX:CHC), one of Australia's leading fully integrated property groups, with over 22 years' experience managing high quality property on behalf of institutional, wholesale and retail clients. Charter Hall has $10 billion of funds under management across the office, retail and industrial sectors. The Group has offices in Sydney, Melbourne, Brisbane, Adelaide and Perth. The Group's success is underpinned by a highly skilled and motivated team with diverse expertise across property sectors and risk-return profiles. Sustainability is a key element of its usiness approach and by ensuring its actions are commercially sound and make a difference to its people, customers and the environment, Charter Hall can make a positive impact for its investors, the community and the Group. For further information on Charter Hall Group and Charter Hall Retail REIT go to www.charterhall.com.au