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Charter Hall Retail REIT (ASX:CQR) (CQR or the REIT) today announced that it has established a joint venture relationship with the Charter Hall Prime Retail Fund (CPRF), to enter into an unconditional contract to acquire Gateway Plaza in Leopold, Victoria for a total consideration of $117 million. CPRF comprises wholesale investment partner MTAA Super and Charter Hall Group.
The transaction is consistent with the REIT’s strategy to transition the portfolio towards higher growth convenience plus based retail with favourable demographic profiles.
Charter Hall CEO Retail, Greg Chubb said:
“We are pleased to announce the strategic acquisition of Gateway Plaza. By extending the joint venture relationship with wholesale investment partners such as MTAA Super, the REIT is able to extend its access to wholesale capital in addition to existing wholesale partnerships and provides future financial flexibility for CQR. We will continue to explore other opportunities for the joint venture across our existing portfolio and any potential future acquisitions.”
Gateway Plaza is located at the gateway to the Bellarine Peninsula, 10km east of the Geelong CBD and 85km southwest of the Melbourne CBD. The centre underwent an $85m redevelopment in March 2017 and comprises a free-standing shopping centre of approximately 33,510sqm, including a freestanding Bunnings, and car parking for 1,117 vehicles. The centre is anchored by a full-line Coles and Liquorland, Aldi, Kmart and Bunnings, together with 2 existing pad sites and 54 specialty tenancies.
Balancing Environment Concerns
“The investment into a high-quality convenience plus centre like Gateway Plaza aligns with the REIT’s investment strategy and follows our other acquisitions in fast growing metropolitan locations. The Centre benefits from strong anchor covenants with fixed annual growth from both Bunnings and Aldi,” Mr Chubb added.
The centre enjoys a prime location in Leopold, and has a main trade area population of 76,250 residents which is projected to grow to over 88,880 residents by 2026 with 5,900 new developments planned or under construction in the trade area. The catchment enjoys an average per capita income 3.25% above the Victorian non-metro average. Additionally, the region attracts over one million visitors a year, who spend an additional $648 million in the area. This equates to an additional 8,767 permanent residents per year.
Mr Chubb said:
“Strategic asset locations, convenience based, dominance within the trade area, and a diverse mix of strongly performing anchor tenants are recurring themes across our resilient non-discretionary retail portfolio.”
The acquisition will be funded through recent divestments.
The property was offered for sale by Colliers via an open market expressions of interest campaign.