Charter Hall Divests Gladstone Square

Charter Hall Retail REIT announced it had divested Gladstone Square shopping centre in Queensland for $31.5 million (100% interest), executing further on its re-positioning strategy.

The asset was sold at book value, reflecting a yield of 7.25%.

The REIT said that it was pleased to declare a distribution of 14.0 cents per unit for the half year ending 30 June 2017.

Total distributions for FY17 are 28.1cpu, which was in line with FY17 guidance for operating earnings expected to be 30.4 cents per unit and a distribution payout ratio range expected to remain between 90% and 95% of operating earnings.

“The divestment of this non-core property is consistent with our strategy to reduce exposure to freestanding and smaller neighbourhood assets in order to support the acquisition of larger, higher growth assets and value accretive development," REIT Fund Manager Scott Dundas said.

“This financial year we have divested five non-core properties for more than $100 million and with strong demand for retail assets we will continue to explore additional divestment opportunities.

"With the recent divestments at or above book value and the high quality investments into Highfields Village, Salamander Bay Shopping Centre and Arana Hills Plaza we are delivering on our strategy to enhance the quality of the CQR portfolio through strategic acquisitions, divestments and redevelopments in the year ahead,” Mr Dundas said.

The REIT has been carrying out a strategy to transition the portfolio from smaller non-core assets towards larger convenience-based supermarket anchored shopping centres with strong demographic profiles, where it can add value through active management.

Debt facilities used to fund recent acquisitions are expected to be repaid through the Gladstone Square and other future divestments.