Charter Hall Retail REIT - $275 million Institutional Placement to strengthen balance sheet

read-time7 mins
by Charter Hall Announcements

To access this part of the website, please select your country of residence from the following list.

The country of my primary residence is:

Due to legal restrictions, access to this website is only available to residents of Australia and New Zealand from within Australia or New Zealand. In order to access this website, you must provide the State, Territory or Province and postcode for your primary residential address within Australia or New Zealand.

The State or Territory of my primary residence in Australia or the Province of my primary residence in New Zealand is:

Due to legal restrictions, access to this website is only available to residents of Australia and New Zealand from within Australia or New Zealand. In order to access this website, you must provide the State, Territory or Province and postcode for your primary residential address within Australia or New Zealand.

The State or Territory of my primary residence in Australia or the Province of my primary residence in New Zealand is:

By proceeding you confirm that you are a resident of Australia or New Zealand accessing this website from within Australia or New Zealand and you represent, warrant and agree that:

  • you are not in the United States or a “U.S. person”, as defined in Regulation S under the U.S. Securities Act of 1933, as amended (“U.S. Person”), nor are you acting for the account or benefit of a U.S. Person;
  • you will not make a copy of the documents on this website available to, or distribute a copy of such documents to, or for the account or benefit of, any U.S. Person or any person in any other place in which, or to any other person to whom, it would be unlawful to do so; and
  • the state, territory or province and postcode provided by you below for your primary residence in Australia or New Zealand are true and accurate.

I agree to the above terms Yes or No.

Unfortunately, legal restrictions prevent us from allowing you access to this website. If you have any questions, please contact us by e-mail by clicking on the link below.

Contact Us

Not for release to US wire services or distribution in the United States

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

  • A fully-underwritten institutional placement to raise $275 million (“Placement”); and
  • A non-underwritten Unit Purchase Plan (“UPP”) to eligible unitholders in Australia and New Zealand to raise up to $25 million, together the “Equity Raising”1.


The proceeds from the Equity Raising will be used to strengthen CQR's balance sheet and provide financial flexibility to enable continued execution of strategy.

Following the Placement, the REIT's pro forma2:

  • Balance sheet gearing is forecast to reduce to 22.6%
  • Look-through gearing is forecast to reduce to 28.6%
  • Cash and undrawn debt facilities is forecast to increase to $407 million

As announced on 20 March 2020, CQR's FY20 earnings and distribution guidance remains withdrawn due to uncertainty from the COVID-19 pandemic. It is CQR’s intention to pay a distribution for 2HFY20 taking into account the operating cashflow generated during the period.

While the duration and economic impacts of the COVID-19 pandemic remain uncertain, the REIT's operations are resilient and focussed on convenience retail:

  • Supermarket sales continue to grow, underpinning customer visitation and financial performance
  • Strategy remains focussed on non-discretionary convenience retail and everyday needs
  • Continued portfolio quality refinement through on-going portfolio curation
  • Tenants and shoppers supported by federal and state stimulus packages including the Commonwealth JobKeeper program

Operational Update

While the impacts of COVID-19 have been significant, CQR’s anchor tenants have all remained open and trading to meet the everyday needs of customers throughout this period. The sales performance of CQR’s anchor tenants was significantly elevated during March and our centres experienced a large increase in visitation and foot traffic. This has started to normalise during April as buying patterns have returned to normal.

Throughout this period, CQR’s primary focus in conjunction with our tenant customers has been the health and safety of our shoppers and the communities in which we operate. We have proactively managed social distancing measures and government regulations to ensure the safety of all staff, tenants and customers in our centres.

Major tenants Woolworths, Coles, BP, Wesfarmers and Aldi represent in excess of 51% of rental income and as at 31 March 2020, 60% of CQR’s supermarkets are currently paying turnover rent.

As at 24 April 2020, tenants representing 87% of portfolio income are open and trading. Importantly, numerous tenants that elected to voluntarily close have recently advised they intend to progressively re-open from this week. The National Cabinet Mandatory Code of Conduct (Commercial Code) defines the concept of proportionality and that rental relief will be provided in proportion to the reduction in trade to qualifying tenants.

CQR will support COVID-19 impacted tenants under the new laws giving effect to the Commercial Code and will actively partner with our tenant customers to ensure sustainable and long-term outcomes. CQR estimates that 25% - 30% of tenants by portfolio income are defined as Small to Medium Enterprises (SMEs) under the Commercial Code.

Institutional Placement

CQR is undertaking a fully underwritten institutional placement to raise $275 million, representing approximately 20% of units on issue prior to the Equity Raising.

New units under the Equity Raising will be issued at a fixed issue price of $2.90, which represents a:

  • 7.9% discount to the last close price of $3.15 on 24 April 2020; and
  • 8.4% discount to the 5 day VWAP of $3.167 on 24 April 2020.

It is intended that eligible institutional unitholders who bid for up to their ‘pro rata’ share of new units under the Placement will be allocated their full bid, on a best endeavours basis3,4 .

New units will rank equally with existing CQR units and will be entitled to the distribution for the six months ending 30 June 2020.

Unit Purchase Plan

Eligible unitholders in Australia and New Zealand will be invited to subscribe for up to a maximum of $30,000 in additional units, free of transaction and brokerage costs via a UPP. The new units will be offered at the same price as investors in the Placement, being $2.90 per unit. The UPP will not be underwritten and is expected to raise up to $25 million. New units issued under the UPP will rank equally with existing units and will be entitled to the full distribution for the half year ending 30 June 2020.

Further information on the UPP will be lodged with the ASX and sent to eligible unitholders on or around 5 May 2020.


Event Date (2020)
Record date for UPP7:00pm, Friday, 24 April
Trading halt and announcement of the Equity RaisingMonday, 27 April
Placement bookbuildMonday, 27 April
Trading of units recommences on the ASXTuesday, 28 April
Settlement of units under the PlacementThursday, 30 April
Allotment and normal trading of units issued under the PlacementFriday, 1 May
UPP offer opens and booklet is dispatchedTuesday, 5 May
UPP offer closes5:00pm, Thursday, 21 May
UPP allotment date  Thursday , 28 May
Dispatch of holding statements and normal trading of new units issued under the UPPFriday, 29 May

Additional information

Additional information about the Equity Raising, including certain key risks, is contained in the investor presentation released to the ASX today.

Announcement authorised by the Board


1 The Equity Raising structure balances the need for certainty of proceeds received through the Placement with CQR's desire to provide its retail unitholders with the opportunity to participate through the UPP. The cap on the UPP of $25 million is considered appropriate to provide the opportunity for the majority of CQR's retail unitholders to achieve a pro rata allocation having regard to the total Equity Raising size, the construct of CQR's register and historical take-up rates in UPPs. CQR may, in its absolute discretion, scale back applications over this amount or apply a higher cap to the UPP and scale back applications over the higher cap.

2 Pro forma as at 31 December 2019, including the impact of the Placement and other post-balance date adjustments outlined in Annexure 1 of the Investor Presentation

3 An eligible institutional unitholder's existing holding will be estimated by reference to CQR’s latest available beneficial register which shows historical holdings as at the date of that register and is not up to date. There is no verification or reconciliation of the holdings as shown in the historical beneficial register and accordingly this may not truly reflect the participating eligible institutional unitholder’s actual holding. CQR and the joint lead managers do not have any obligation to reconcile assumed holdings (e.g. for recent trading or swap positions) when determining allocations. Institutional unitholders who do not reside in Australia or other eligible jurisdictions will not be able to participate in the placement. CQR and the joint lead managers disclaim any duty or liability (including for negligence) in respect of the determination of an eligible institutional unitholder’s allocation using their assumed holdings

4 Eligible institutional unitholders who bid in excess of their ‘pro-rata’ share as determined by CQR and the joint lead managers are expected to be allocated a minimum of their ‘pro-rata’ share on a best endeavours basis as set out in footnote 1 above, and any excess may be subject to scale back.

5 All dates and times are indicative only and subject to change. Unless otherwise specified, all times and dates refer to Sydney time. 


View ASX Announcement

View Investor Presentation