This article is from the Australian Property Journal archive
CHARTER Hall Retail REIT has offloaded a large stake of its US portfolio, a 60% interest in 32 properties for $US168 million.
The properties are owned in partnership with Desco Group and Regency Centres, and parties associated with the Desco Group will acquire the trust’s interest for $US168 million (approximately $A171.1 million), representing a yield of 8.5%. The price reflects a discount of 4.3% on the June 2010 book value.
At the same time, Regency has decided to take a distribution in kind of four assets for its 16% interest.
CQR CEO Steven Sewell said the sale is another step in realising the equity from the trust’s investments in the United States and New Zealand, with the proceeds of this sale to be reinvested into sub-regional shopping centres in Australia.
The portfolio sale, which accounts for approximately 53% by value of the remaining United States investments, delivers on the REIT’s strategy of re-weighting its portfolio to Australia and will increase the proportion of net tangible assets represented by the Australian portfolio to 78%3.
The deal will also eliminate $US107.0 million of property-level debt, will release approximately $A64.72 million of proceeds and will reduce the REIT’s balance sheet gearing by 2.1% and look through gearing by 5.1%.
The transaction remains conditional on the purchaser obtaining approval from the principal lender and documentation of the agreement between Regency and Desco, due to occur by the end of March 2011.
“On completion of this sale, the REIT’s United States portfolio will represent only 8% of NTA and we remain on track to achieve the sell down of the majority of the balance of our United States investments by June 2011,” Sewell concluded.
Australian Property Journal
