This article is from the Australian Property Journal archive
CHARTER Hall has closed its first $500 million Core Plus Retail Fund, an open ended trust targeting retail properties in Australia and New Zealand.
Wholesale investors including the $60 million subscribed by Charter Hall Umbrella Fund have invested 38% of the $250 million of equity raised for the first close, with the balance retained by the Charter Hall Property Trust. Subsequent CPRF closes will further reduce the coinvestment by CHPT towards its long term target of 20% of CPRF equity.
CPRF is the third fund established by Charter Hall in a series of sector specific core plus investment vehicles, following the Core Plus Office Fund in 2006 and the Core Plus Industrial Fund last year.
Similar to its sisters, the fund’s core plus approach targets 70% to 80% in core holdings and 20% to 30% in properties which need repositioning or refurbishment.
A three year debt facility of $250 million has been secured for CPRF from National Australia Bank and St George Bank.
CPRF has drawn $250 million of equity and $185 million of debt to fund the portfolio which was previously 100% owned by CHPT. The CPRF portfolio has a completion value of $500 million and the debt capacity in the facility will be utilised to fund the payments required over the next three years. Initial gearing in CPRF is 42.5%.
CHC has used the proceeds from the sell down of asset to CPRF to reduce its debt.
CHC’s finance facility with NAB has been reduced to $100 million from $350 million and extended to a three year term until July 2011. This transaction reduced CHC’s debt to approximately $50 million (currently representing a gearing ratio of less than 10%) which is fully hedged for 2.7 years at an interest rate of 7.3% (including margins).
Charter Hall shares fell 6 cents lower at 90 cents.
Australian Property Journal
