Charter Hall Retail REIT Completed Its Fully Underwritten $150 Million Institutional Placement

  • Apr 02, 2019 AEDT
  • Team Kalkine
Charter Hall Retail REIT Completed Its Fully Underwritten $150 Million Institutional Placement

Leading real estate investment trust, Charter Hall Retail REIT (ASX: CQR) has successfully completed the fully underwritten institutional placement which was announced on 1 April 2019. Through the placement, the company has raised $150 Mn by issuing around 33.3 Mn new units (New Units) at an issue price of $4.51 per unit.

This placement was undertaken to fund the acquisition of Rockdale Plaza, NSW, as announced on 1 April 2019.

As per the announcement, the New Units are going to settle on 4 April 2019, and they will rank equally with existing Units of the company. The allotment and normal trading of the New Units will occur on 5 April 2019 and they will receive the full distribution for the half year ending 30 June 2019.

As announced on 1 April, along with the placement, the company is also undertaking a non-underwritten Unit Purchase Plan (UPP), which is expected to raise up to $10 million. Under this Unit Purchase Plan, all the eligible unitholders in Australia and New Zealand will be allowed to subscribe for up to $15,000 of new units which will be free of brokerage and transaction costs.

The new units will be offered at the same price as the Placement of $4.51 per unit and they will rank equally with existing units of the company and will receive the full distribution for the half year ending 30 June 2019.

The acquisition for which the Placement and UPP have been undertaken, is regarding 100% interest in Rockdale Plaza for $142 million. Rockdale Plaza is a dominant Convenience Plus asset which is strategically located in the inner suburbs of Sydney, 12km from the CBD. The acquisition of Rockdale Plaza will provide REIT with an opportunity to acquire a high performing, convenience-based centre and this acquisition is consistent with the company’s strategy of owning convenience-based assets dominant within their relevant catchment with strong income growth opportunities.

Despite the impact of the Acquisition and Placement, the company is expecting its operating earnings to grow by 2% which is in line with its previous guidance. Following the Acquisition and Placement, balance sheet gearing is forecast to be 32.2 percent and look through gearing is forecast to be 35.1 percent.

The company’s shares were placed in the trading halt on 1 April 2019, however, today the shares have resumed trading on the ASX.

Now, let’s have a glance at the company’s stock performance and the return it has posted over the past few months. The stock is trading at a price of $4.515, down by 2.903% during the day’s trade with a market capitalisation of ~$1.88 billion as on 2 April 2019 (AEST 1:52 PM). The counter opened the day at $4.630 and reached the day’s high of $4.640 and touched a day’s low of $4.520 with a daily volume of ~ 841,207. The stock has provided a year till date return of 4.49% & also posted returns of 9.93%, 3.79% & 0.65% over the past six months, three & one-month period respectively. It had a 52-week high price of $4.740 and touched 52 weeks low of $3.800, with an average volume of ~961,232.


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