Charter Hall Retail REIT April 2019 Acquisition and Institutional Placement

Charter Hall Retail Management Limited, as responsible entity of Charter Hall Retail REIT (ASX:CQR) (CQR or the REIT) today announces that:

• the REIT has entered into an agreement to acquire a 100% interest in Rockdale Plaza, NSW for a total consideration of $142 million¹ (Acquisition)
• it will undertake a fully underwritten $150 million institutional placement (Placement) at an issue price of $4.51 per unit (Issue Price) to partially fund the Acquisition and associated transaction costs
• the REIT will also undertake a non-underwritten Unit Purchase Plan (UPP) to eligible unitholders in Australia and New Zealand, expected to raise up to $10 million²
• including the impact of the Acquisition and Placement and barring any unforeseen events and no material change in market conditions, CQR reaffirms FY19 operating earnings growth of 2%, in line with its previous guidance

Acquisition

The REIT has entered into an agreement to acquire a 100% interest in Rockdale Plaza for $142 million¹, reflecting a capitalisation rate of 6.25%³. Rockdale Plaza is a dominant Convenience Plus asset situated in a strong, established and growing catchment and comprises the largest full-line supermarket in the primary trade area, strong performing mini-majors and convenience focused specialty stores.

• strategically located in the inner suburbs of Sydney, 12km from the CBD with a high profile location on a main arterial road
• 99.8% occupied and generated 4.5 million annual customer visitations (as at December 2018)
• strong tenant covenants, with more than half of centre income underpinned by anchor tenants Woolworths, Big W, Aldi and 7 mini majors
• well maintained centre with further enhancement opportunities to increase food catering and the service offering

Charter Hall’s Retail CEO, Greg Chubb said:

“The acquisition of Rockdale Plaza offers the REIT an exceptional opportunity to acquire a high performing, convenience-based centre. Underpinned by supermarkets and non-discretionary food and service-based uses, the Acquisition aligns with the REIT’s investment strategy and enhances portfolio metrics to ensure we continue to deliver long-term sustainable growth in earnings for investors”.

Placement

To partially fund the Acquisition and associated transaction costs, the REIT is undertaking a fully underwritten institutional placement to raise $150 million. The Placement is fully underwritten by UBS AG, Australia Branch.

The Placement will be issued at a fixed price of $4.51 per unit, which represents a:

• 3.0% discount to last close of $4.65 on 29 March 2019
• 3.6% discount to the 5 day VWAP of $4.68 on 29 March 2019

Units issued under the Placement will rank equally with existing CQR Units and will be entitled to the full distribution for the half year ending 30 June 2019.

The Placement is within CQR's placement capacity under ASX listing rule 7.1 and unitholder approval is not required.

Unit Purchase Plan

Eligible unitholders in Australia and New Zealand will be invited to subscribe for up to $15,000 of new units, free of brokerage and transaction costs, via a UPP. The new units will be offered at the same price as the Placement of $4.51 per unit. The UPP will not be underwritten and is expected to raise up to $10 million⁴. New units issued under the UPP will rank equally with existing CQR units and will be entitled to the full distribution for the half year ending 30 June 2019.

Further information on the UPP will be lodged with the ASX and sent to eligible unitholders on or around 8 April 2019.

To read the document, click on the download link above.

_{Click to view the Acquisition and Placement}

<sub>Click to view the Market Announcement



¹ Excluding transaction costs.
² CQR may (in its absolute discretion) in a situation where total demand exceeds $10 million, decide to increase the amount to be raised under the UPP to reduce or eliminate the need for scale back. CQR reserves the right to scale back applications under the UPP at its discretion.
³ The vendor has also agreed to provide $0.5m of income support which can be applied at CQR’s discretion.
⁴ CQR may (in its absolute discretion) in a situation where total demand exceeds $10 million, decide to increase the amount to be raised under the UPP to reduce or eliminate the need for scale back. CQR reserves the right to scale back applications under the UPP at its discretion.
⁵ As detailed in Annexure A of the investor presentation, excluding any proceeds from the UPP.</sub>