Charter Hall Retail REIT (ASX:CQR)
Charter Hall Retail REIT invests in high quality Australian convenience and convenience plus shopping centres. Its Australian portfolio is geographically diverse and benefits from exposure to key markets along the eastern seaboard and across a number of high growth regions.
Charter Hall Retail REIT is managed by Charter Hall Group (ASX:CHC), one of Australia’s leading property groups which owns and manages office, retail and industrial properties. Charter Hall has over 28 years experience managing high quality office, retail and industrial property on behalf of institutional, wholesale and retail clients, with funds under management totalling $28.4 billion.
The Company operates the following divisions:
% of Total Revenue
% of Operating Earnings
The rise in net tangible assets per security of 2.2% to $4.22 is due in a roughly equal measure to an increase in rental revenue and tightening cap rates. The gains made over the 2018 financial year are a result of the sustained income growth. Key to Group’s year of transition has been the improvement in portfolio quality, demonstrated by the high volume of executed transactions resulting in improved portfolio operations
Maintaining strong tenant relationships, optimising tenancy mix through proactive leasing and enhancing the overall shopper experience
Enhance portfolio quality:
Through value enhancing redevelopment, selective acquisitions of higher growth properties and low growth disposals
Prudent capital management:
With a focus on a strong and flexible balance sheet, prudent gearing and a sustainable payout ratio
The Group operates in markets including:
Industry Revenue (2018)
Growth Rate (Annual 13-18)
Retail property operators
Major competitors include:
- ALE Property Group (ASX:LEP)
- Investa (ASX:IOF)
- DEXUS Property Group (ASX: DXS)
Charter Hall launched in Sydney by current executive, Cedric Fuchs together with David Southon (Joint Managing Director from 2004 - 2016 and Executive Director until February 2016) and Andre Biet (Managing Director from 1991 to 2004 and Executive Director until October 2007).
Between 1991 and 1994 the initial focused was on commercial property advisory work.
First syndicate launched. CHIF1 is the first in a series focusing on high quality single and multi-asset property syndicates
first institutional opportunistic property fund launched with AMP Capital. First of a series of five opportunistic funds largely comprising Australian superannuation funds.
Transfield Holdings acquired 50% of Charter Hall.
Charter Hall listed on the ASX.
Launched the Core Plus Office Fund, the first in a series of long-term, open- ended core investment vehicles.
Launched the Core Plus Industrial Fund.
The Gandel Group acquired a strategic 12% interest in Charter Hall invested significant capital in the unlisted Core Plus Office Fund.
Charter Hall acquired the management rights to Macquarie Group’s real estate funds management platform, increased its funds under management total to over $10 billion.
Charter Hall celebrated its 20 year anniversary.
Established the first Bunnings Partnership launching BP1.
Charter Hall launched the $400 million Core Logistics Partnership.
In partnership with Host Plus Charter Hall acquired 54 hospitality assets leased to ALH for $603m.
Charter Hall raised $225 million in equity, enabling the Group to fund identified equity investments alongside its capital partners and to provide capacity for future co-investments.
Acquired the Arana Hills Plaza
Acquired Salamander Bay Centre
Acquired Highfields Village
Acquired Gateway Plaza
Board of Directors and Management
John Harkness – Independent Chairman
Sue Palmer – Independent Director
Michael Gorman – Independent Director
David Harrison – Managing Director and Group CEO
Greg Chubb – Retail CEO
Mr. Roger Davis – independent Non-Executive Director & Chair-Elect
Mark Bryant – Joint Company Secretary
Charisse Nortjé – Joint Company Secretary
Major risks include:
Prudent capital management is one of the key strategies of the REIT, aligning with the REIT’s resilient portfolio of non-discretionary Australian supermarket anchored shopping centres.
The REIT sources its capital through:
- Debt sourced from a diverse mix of local and international banks and the US private placement bond market
- The listed Australian equity market
The REIT is able to alter its capital mix by issuing new units, utilising the DRP, electing to have the DRP underwritten, adjusting the amount of distributions paid, activating a unit buy-back program or selling assets to reduce borrowings.
The REIT’s principal financial instruments comprise cash and cash equivalents, receivables, payables, interest bearing liabilities and derivative financial instruments. The table below shows the REIT’s exposure to a variety of financial risks and the various measures it uses to monitor exposures to these types of risks. The REIT manages its exposure to these financial risks in accordance with the REIT’s Financial Risk Management (FRM) policy as approved by the Board. The policy sets out the REIT’s approach to managing financial risks, the policies and controls utilised to minimise the potential impact of these risks on its performance and the roles and responsibilities of those involved in the management of these financial risks. Derivative financial instruments are used exclusively for hedging purposes and not for trading or speculative purposes.
Foreign exchange risk
The risk that changes in foreign exchange rates will change the Australian dollar value of the REIT’s foreign denominated net assets or earnings.
Interest rate risk
The risk that changes in interest rates will change the fair value or cash flows of the REIT’s monetary assets and liabilities.
The risk that the REIT has insufficient liquid assets to meet its obligations as they become due and payable.
The risk a contracting entity will not complete its obligations under a contract and will cause the REIT to make a financial loss.
Annual Report 2018, P. 32, 37
Annual Report 2018, P.4
Annual Report 2018, P. 02
- ^ http://www.ibisworld.com.au/industry/default.aspx?indid=1894
- ^ https://www.owler.com/company/charterhall
- ^ https://www.charterhall.com.au/Funds/Retail/Charter-Hall-Retail-REIT/About/Board-of-Directors/
- ^ https://www.listcorp.com/asx/cqr/charter-hall-retail/news/joint-company-secretary-resignation-1544890.html
- ^ https://www.listcorp.com/asx/cqr/charter-hall-retail/news/appointment-of-joint-company-secretary-1665148.html
Annual Report 2018, P. 32, 37
Annual Report 2018, P. 44, 49