CQR Acquisition of Coomera City Centre
Charter Hall Retail REIT (ASX:CQR) (the ‘REIT’) today announced it has entered into an option to acquire Coomera City Centre in Coomera, Queensland, for $59.2 million. The transaction represents a year one yield of 7.4%.
Located approximately 20 kilometres north of the Gold Coast, Coomera City Centre is a 9,431 square metre neighbourhood shopping centre anchored by a strongly performing Woolworths supermarket and a Dan Murphy’s liquor store with 33 specialty retailers. The centre is 97.8% leased and has an 8.8 year weighted average lease expiry, with the Woolworths and Dan Murphy’s leases contributing 48% of annual base rent.
Fund Manager, Scott Dundas, said the acquisition of Coomera City Centre is in line with the REIT’s investment strategy of investing in strongly performing, well located supermarket anchored shopping centres.
“Coomera City Centre is located in one of South East Queensland’s major growth corridors, with the trade area population forecast to grow at 4.5% over the next five years – a standout location that has growth well above the national average.
“Charter Hall will take on the end-to-end property management of the centre to ensure Coomera City Centre benefits from this growth and continues to provide a high quality and diverse range of services to its local community. This high quality addition to the REIT is expected to deliver stable long term returns. In particular, appealing features complementing the REIT’s strategy include the high population growth, which is expected to drive income growth, and maintaining a high proportion of base rent generated from anchors within our non-discretionary based portfolio of shopping centres,” Mr Dundas added.
The REIT will fund the acquisition from existing debt facilities and has credit approval for an additional $60 million increase to the facility limit of its syndicated debt facility, increasing this facility to $535 million and maintaining the current $111.5 million undrawn debt capacity post completion of the Coomera transaction. The maturity of this debt facility will also be extended to July 2019 from August 2018, five years from the expected settlement date of Coomera City Centre in July 2014, with no change in pricing.
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