Charter Hall Retail REIT March 2016 Quarterly Operational Update

Consistent Portfolio Performance through Active Asset Management

Specialty shop sales grew at 4.5%, up from 3.5% at 31 December 2015, highlighting the improving local retail markets in which the REIT operates.

The REIT’s anchor tenants, excluding the resource states of Queensland and Western Australia, reported solid growth for stores in turnover of 3.2%. Including Queensland and Western Australia, anchor tenant MAT growth was 1.2% at 31 March 2016.

The occupancy of the REIT’s portfolio remained stable at 98.3%. Specialty rental rate growth was 1.0% for the nine months to March 2016, with new leases and renewals both achieving positive results.

Enhancing the quality of the portfolio

The REIT has continued to enhance the quality of its portfolio through recycling out of non-core properties with the sale of Ballajura Central and Collie Central, two non-core properties in Western Australia, occurring in February 2016 and March 2016 respectively for a combined value of $20.3 million. The net proceeds were used to pay down the REIT’s revolving bank debt facility. The sale of these assets reflected a 4.7% premium to the June 2015 book values.

Value enhancing redevelopment is a key element of the REIT’s growth strategy to deliver value to our centres, communities and unitholders. The current redevelopment pipeline of A$129 million remains on time and is forecast to produce a stabilised yield of 7.4%.

Prudent Capital Management - Further Improvements to the CQR Debt Platform 

Following the strong support for our inaugural issue into the US Private Placement market (USPP), the REIT continued its diversification into non bank debt sources with a further ten year US$125 million (A$177.4 million) USPP which will mature in May 2026. The notes will be issued with a fixed US$coupon of 3.76% which is 100% hedged in Australian Dollars and represents a margin of 2.55% over the bank bill swap rate (BBSW).