Charter Hall Retail REIT has sold three shopping centres for $91 million as it shifts focus to larger, higher growth properties.
The properties include a freestanding Woolworths neighbourhood centre in Wynyard, Tasmania, Albany Creek Square in Brisbane and Renmark Plaza in Renmark, South Australia.
Settlement of the Wynyard and Albany Creek Square properties is scheduled to occur in December 2017 and the settlement of Renmark Plaza will occur during the third quarter 2018. Charter Hall said the combined total sale price is broadly in line with book value.
The Albany Creek mall was purchased by Sydney’s Fortius Funds Management for nearly $56 million on a 6.96 per cent initial yield.
Property developer Revelop bought Renmark Square for around $25m, while a private investor bought the Wynyard Woolworths for around $11 million.
The transactions were all handled by JLL.
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The Albany Creek Square Shopping Centre in Brisbane is among the properties sold.
“With continued investor demand for smaller retail assets, we have taken the opportunity to divest these three assets in order to maximise the value to the fund," Charter Hall Retail chief executive officer Greg Chubb said.
“Our transactions during the past 12 months demonstrate our ability to execute on our strategy of recycling capital into assets that are well located with good population growth and which are positioned to be the dominant convenience based shopping centres in their respective local markets.
“During FY17, we completed the disposal of a number of lower growth assets along with the acquisition of potential higher growth assets to build a more resilient non-discretionary portfolio focused on the provision of food and services to local communities.”
The REIT will continue its investment strategy to enhance portfolio earnings through value accretive redevelopments, selective acquisitions of properties with potential for higher growth, share buybacks and the divestment of lower growth assets.
The REIT said its FY18 earnings guidance remains unchanged of 30.2¢ per unit to 30.6¢ per unit.
Main image: Renmark Square in South Australia