This article is from the Australian Property Journal archive
CHARTER Hall Retail REIT has posted a disappointing statutory profit of $62.9 million for the 12 months to June 30, representing a fall of 14.8% from $73.8 million, after selling its United States and New Zealand assets to refocus on the Australian market.
The trust’s operating earnings including non cash items was $85.2 million, down 13.7% from $98.7 million. Revenue for the year declined 3.5% to $229.5 million.
CEO Steven Sewell said the portfolio, which now consists of mainly Australian supermarket anchored shopping centres, performed well during the year reinforcing the strategy to reweight to Australia.
The trust made a distribution of 24.8 cents per unit, which is below then 26.50 cpu despite increasing the payout ratio from 80% in FY10 to 89% FY11.
The REIT’s total portfolio occupancy increased to 97.5% at 30 June 2011 from 97.2% at 31 December 2010, with same property NOI growth of 3.1%, following a continued focus on active asset management in Australia and Europe.
The Australian portfolio performed slightly ahead of expectations across the year, with same property NOI growth of 3.8%, stable occupancy of 98.8% and a busy period of leasing activity with 93 renewals and 86 new lease transactions resulting in a rental rate growth of 7.3%.
In Europe, the Polish and German properties delivered a solid overall performance with occupancy of 98.3% and same property NOI growth of 2.5%.
The value of the REIT’s portfolio at 30 June 2011 increased 0.6% over the prior book value to $1.93 billion. Net tangible assets was $1.070 million or $3.54 per unit.
The weighted average capitalisation rate in Australia and Europe tighten marginally from 8.11% to 8.07%. Excluding the impact of acquisition costs, the value of the Australian portfolio increased by 1.3% or $18.1 million over the prior book value.
At 30 June 2011, the REIT had cash and undrawn facilities of $87.3 million, with balance sheet gearing forecast to be 38.4% post the completion of announced transactions, within the target gearing range of 30% to 40%.
The trust has only six assets remaining in the US. Sewell said the trust will continue to pursue opportunities to dispose of these assets as conditions stabilise across the relevant sub-markets in the US.
Meanwhile Sewell also announced that the trust will exit Europe over the next three years as conditions in capital and real estate transaction markets permit, in order to invest further into Australia to achieve enhanced returns through the identified capital management initiatives.
“The strategy and market positioning for Charter Hall Retail REIT is to be a specialist owner of supermarket anchored neighbourhood and sub-regional shopping centres in Australia.
“We expect income and capital growth prospects will continue to be underpinned by the strength and resilience of the Australian supermarket anchor tenants, and the management teams’ capability and track record in managing returns from the neighbourhood and sub-regional retail asset class,” he added.
FY12 operating earnings are expected to be in the range of 28.5 to 29.0 cents per unit, with distributions to reflect a payout ratio of between 85% and 95% of operating earnings. This operating earnings forecast represents a yield of 8.1% at the stated NTA per unit of $3.54.
Australian Property Journal