Charter Hall Retail REIT March 2015 Quarterly Operational Update
Charter Hall Retail REIT (ASX:CQR) (the REIT) today announced an operational update for the quarter ending 31 March 2015.
The occupancy of the REIT’s portfolio remained steady at 98.4% at 31 March 20151. Specialty rental rate growth is 2.0% for the nine months to March 2015, with new leases and renewals contributing equally to this result.
The REIT’s anchor tenants, excluding the resource states of Queensland and Western Australia which were impacted during the period, reported solid growth for stores in turnover of 3.0%. Including Queensland and Western Australia, anchor tenant MAT growth was 1.6% at 31 March 2015.
Specialty shop sales grew at 2.5%, up from 2.1% at 31 December 2014, highlighting the improving local retail markets in which the REIT operates.
Enhancing the quality of the portfolio
The sale of the three non-core properties in Central Western NSW is expected to settle by the end of May 2015 with the call option deed being exercised on 4 May 2015. The combined sale price reflects a 3.5% premium to the June 2014 book value with the net proceeds to be utilised to retire approximately $18.9 million of CMBS notes and pay down approximately $2.2 million of the REIT’s revolving bank debt facility.
Transforming the portfolio’s debt platform
The REIT has completed several key initiatives to restructure its debt funding platform, including a US Private Placement issuance of US$200 million (A$252 million). These initiatives will increase the REIT’s weighted average debt maturity from 3.1 years to 6.02 years and significantly reduce the weighted average debt margin3 from 177 basis points to 155 basis points per annum.
Scott Dundas, Fund Manager of the REIT, said: “The REIT has continued to deliver solid results during the third quarter, reflecting the strength of the non-discretionary retail sector. During the period we have actively addressed the REIT’s debt funding platform and continued to enhance the quality of the portfolio through strategic divestments and redevelopments.”
As advised at the REIT’s 1HY15 financial results FY15 guidance for operating earnings and distributions remains unchanged.
1 Excludes Bathurst, Narromine, Wellington and Windsor – assets contracted for sale
2 Calculated at 30 April 2015 and excludes A$CMBS facility.
3 Includes the REIT’s share of JV debt ($117.5m) and amortisation of upfront debt costs and excludes line fee on undrawn debt.
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