This article is from the Australian Property Journal archive
CHARTER Hall has launched a new Direct Retail Fund following the restructure of the Core Plus Retail Fund.
DRF is an unlisted retail property fund with an initial seven year term and is targeting 8 cents per unit annualised initial distribution.
The fund has an initial portfolio of six retail shopping centres located in New South Wales, Victoria, Queensland and New Zealand and will look to acquire further suitable investments to expand the diversified portfolio of quality sub-regional, neighbourhood and household retail shopping centres.
Joint managing director David Harrison said through the successful restructure of CPRF, the fund was able to provide investors with immediate access to a $177 million retail portfolio with an occupancy level of 98.4%, a weighted average lease expiry of 7.3 years.
DRF has been awarded Lonsec’s second highest rating, ‘recommended upper end’.
Harrison said the launch of DRF follows the strong investor interest in Charter Hall’s Direct Industrial Fund, which has raised $42 million of equity since its launch in July 2010.
Charter Hall Group currently has a 66% interest in DRF (circa $65 million equity investment) which it intends to sell down to circa 20% as part of the equity raising, potentially releasing circa $45 million from the Charter Hall Group co-investment portfolio. Charter Hall Group currently consolidates DRF in its group accounts given the Group’s interest is greater than 50%. Once circa $25 million has been raised for DRF Charter Hall Group will no longer consolidate DRF.
As part of the CPRF restructure Charter Hall Group has 100% economic ownership of two assets located in Mentone. One of these assets, the Mentone development site jointly owned with Harvey Norman, has been sold and settled for $44 million ($22 million 50% Charter Hall Group interest) with Charter Hall Group retaining ownership of the Mentone Showrooms investment (approximately $18 million) pending sale negotiations.
Australian Property Journal
