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Charter Hall utilises integrated platform to secure $171.4m industrial portfolio for three managed funds

24/11/2014

Charter Hall Group (ASX:CHC) (Charter Hall or the Group) today announced it has secured a $171.4 million industrial portfolio leased to the leading Australasian poultry producer and processor, Inghams Enterprises Pty limited (Inghams) on behalf of its managed funds. The transaction reflects an average initial yield of 7.82% benefiting from a Weighted Average Lease Expiry (WALE) by income of 22 years.

The portfolio of six quality industrial assets has been acquired by three Charter Hall managed funds/partnerships as follows:

  • Core Logistics Partnership (CLP) - CLP has acquired the Murarrie, Brisbane and Edinburgh Park, Adelaide facilities for a total price of $105.8 million.
  • Direct Industrial Fund (DIF2) – DIF2 has acquired three facilities including Ingleburn, Sydney; Thomastown, Melbourne; and Cleveland, Brisbane for a combined total price of $53.2 million.
  • Core Plus Industrial Fund (CPIF) - acquired a $12.4 million facility that adjoins its Hemmant property located within the Port of Brisbane precinct.

The portfolio is 100% leased to Inghams, a leading Australasian poultry producer, with initial lease terms of between 20 and 25 years. The triple net lease structure incorporates annual rent reviews calculated as the lesser of 3.0% or double the Australian CPI growth rate. As part of the transaction, Inghams will remain responsible for all capital expenditure and structural repairs on the properties.

David Harrison, Charter Hall’s Joint Managing Director, said the acquisition is consistent with Charter Hall’s strategy of reweighting its portfolio toward assets with long leases to strong credit quality tenants with leading market positions.

“The six properties are all well located in strategic industrial locations, with high underlying land values underpinning the long term triple net cashflow. Inghams is the largest integrated poultry producer in Australasia, with blue chip customers such as Woolworths, Aldi, KFC and McDonalds, and we are pleased to be welcoming this new tenant customer into our portfolio,” Mr Harrison said.

Charter Hall has grown each of these three industrial funds during FY15 with acquisitions for each fund since July including:

  • CPIF - $85 million. CPIF was launched in 2007 and has grown to $1 billion in assets secured by a 9 year WALE, with a current equity raising at an advanced stage which is expected to provide further growth capacity. Charter Hall has a $72 million or 11.7% equity investment stake.
  • CLP - $153 million. CLP was launched in 2013, has grown to $780 million in assets secured by a 13 year WALE, with further growth capacity. Charter Hall has an $85 million or 15% equity investment stake.
  • DIF2 - $53.2 million. DIF2 was launched in December 2012 and is now close to fully deploying its investment capacity with $237 million of industrial assets diversified across 10 properties secured by a WALE of 14 years.

Mr Harrison added: “We have been actively reweighting our portfolio to industrial over the past two years, with this acquisition further increasing our total industrial portfolio to $2.35 billion with a weighted average lease expiry of 10.2 years and average rental growth exceeding 3% p.a.

“The diversity of Charter Hall’s managed funds has allowed us to secure a large portfolio that meets the needs of various funds, providing the vendor confidence to contract with a group that can execute on portfolio acquisitions. This is evidenced by $775 million of portfolio acquisitions since August 2014,” said Mr Harrison.

CLP - $153 million. CLP was launched in 2013, has grown to $780 million in assets secured by a 13 year WALE, with further growth capacity. Charter Hall has an $85 million or 15% equity investment stake.• DIF2 - $53.2 million. DIF2 was launched in December 2012 and is now close to fully deploying its investment capacity with $237 million of industrial assets diversified across 10 properties secured by a WALE of 14 years.Mr Harrison added: “We have been actively reweighting our portfolio to industrial over the past two years, with this acquisition further increasing our total industrial portfolio to $2.35 billion with a weighted average lease expiry of 10.2 years and average rental growth exceeding 3% p.a.“The diversity of Charter Hall’s managed funds has allowed us to secure a large portfolio that meets the needs of various funds, providing the vendor confidence to contract with a group that can execute on portfolio acquisitions. This is evidenced by $775 million of portfolio acquisitions since August 2014,” said Mr Harrison.

View ASX Release

For further information, please contact:

David Harrison

Joint Managing Director
+61 8651 9142 
david.harrison@charterhall.com.au

David Southon
Joint Managing Director
+61 8651 9143
david.southon@charterhall.com.au

 

 

For investor enquiries, please contact

Kylie Ramsden 
Head of Listed Investor Relations 
+61 8651 9204 
kylie.ramsden@charterhall.com.au

For media enquiries, please contact

Rachel Mornington-West
Head of Marketing and Communications
Charter Hall
+61 8651 9248
rachel.mornington-west@charterhall.com.au