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CQR Distribution for the Half Year Ended 30 June 2014 and Operational Update


Charter Hall Retail Management Limited (CHRML), as responsible entity for Charter Hall Retail REIT (ASX:CQR) (the ‘REIT’) is pleased to announce its distribution for the half year ending 30 June 2014 and provide an operational update for the REIT.

DistributionCHRML today declares a distribution of 13.65 cents per unit for the half year ending 30 June 2014, representing a full year distribution of 27.3 cents per unit for FY14, growth of 1.9% on the prior financial year.

Proposed payment details are:

Distribution 13.65 cents per ordinary unit
Record date 30 June 2014 (5.00pm)
Units trade ex-distribution 26 June 2014
Payment date on or about 29 August 2014

The Distribution Reinvestment Plan (DRP) will remain active with the DRP issue price determined at a discount of 1.0% to the average of the daily volume weighted average market price of units traded on the ASX during the 15 business days commencing on 3 July 2014. This reflects a change in the REIT’s DRP Plan Rules which will be announced to the market.

Notification of election to participate in the DRP must be lodged with Link Market Services Limited before 5:00pm AEST on 1 July 2014. DRP Units will be allotted on or around 29 August 2014.

Operational and transaction update
For the nine months to March 2014, the REIT completed 92 new leases (including 52 non-comparable leasing deals) and 113 renewals achieving rent growth of 2.7%. Total occupancy was maintained at 98.2% with FY14 same property net operating income (NOI) growth expected to be 2.0%.

Given the more subdued retail environment, anchor1 and specialty tenant MAT growth was slightly down at 3.4% and 0.8% respectively. The REIT’s $62 million Singleton Square redevelopment has also been impacted, taking longer to stabilise given prevailing leasing market conditions. Pleasingly, the $15.7 million South Hedland Square centre has performed in line with expectations and was fully leased on completion in October 2013.

In April, the REIT announced that it had entered into a Put and Call option to acquire Coomera City Centre in Coomera, Queensland, for $59.2 million. 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. The Put and Call option will be exercised after 1 July 2014, subject to several conditions precedent.

FY14 operating earnings update
Given the prevailing retail market conditions, the REIT is expected to achieve FY14 operating earnings2 towards the lower end of its previously stated guidance range of between 29.5 and 30.0 cents per unit.

Scott Dundas, Fund Manager of Charter Hall Retail REIT said: “Tougher trading and leasing conditions since the Federal budget and lower consumer confidence are forecast to result in the REIT’s FY15 development projects taking longer to stabilise, which is expected to result in a subdued FY15 operating earnings growth outlook. FY15 operating earnings guidance will be provided at the time the REIT releases its full year results on Wednesday 20 August 2014.

“Despite the softer retail trading environment, we are pleased to announce a distribution for the half year ending 30 June 2014 of 13.65 cents per unit . Our total focus is on our Australian portfolio and looking for opportunities to create value for unitholders, having finalised the sale of our Polish and US assets during the second half of the financial year, ” Mr Dundas added.

1For stores in turnover

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For further information, please contact:
Scott Dundas 
Fund Manager
Charter Hall Retail REIT 
T +61 2 8651 9273

Philip Schretzmeyer
Deputy Fund Manager
Charter Hall Retail REIT 
T +61 2 8651 9246

For investor enquiries, please contact
Kylie Ramsden
Head of Listed Investor Relations 
Charter Hall
T +61 8651 9204

For media enquiries, please contact
Rachel Mornington-West
Head of Marketing and Communications
Charter Hall
T +61 2 8651 9248