Charter Hall pulls the pin on its $1.1 billion new REIT

Charter Hall pulls the pin on its $1.1 billion new REIT

Charter Hall has pulled its the pin on the float of its new $1.12 billion Long WALE REIT after failing to get sufficient investor interest.Institutional investors again voted with their feet against externally managed funds model failing to back Charter Hall’s offering. The Coles HQ in Toorak Road, Hawthorn East, Melbourne, was to be the seed asset in the new Charter Hall REIT. Photo: Gerrit Fokkema Charter Hall announced Wednesday morning the fund did not “attract the sufficient quality of support that the Group deemed appropriate to create an orderly market.””Charter Hall has elected not to proceed with the IPO of Long WALE REIT as scheduled. The Group will consider alternative options for the assets within the proposed Long WALE REIT portfolio,” it said in a statement.The Long WALE REIT was to be priced at $4 a security when it hit the bourse today with a forecast 2017 financial year annualised earnings and distribution yields of 5.3 per cent per security.There were to be an initial 66 assets in the fund, industrial, with 10 assets accounting for 47 per cent of the portfolio; two office assets comprising 29 per cent of the portfolio; and retail, comprising 54 pubs and bottle shops, or 24 per cent of the portfolio.

The portfolio has 100 per cent occupancy and a 12.5 year weighted average lease expiry.It is suggested the half-share of Coles headquarters, known as Battlestar Galactica, at 800 Toorak Road, Hawthorn East, Melbourne, was to be the seed asset for the new fund.Charter Hall paid $140.5 million for the asset from Investa Office Fund, with the remaining half owned by a private investor.Overall, 10 per cent of the portfolio would have been in NSW, with Western Australia at 26 per cent and 25 per cent in South Australia.The decision not to proceed comes as Zenith was awarded Charter Hall’s Direct Property business 2016 fund manager of the year.The float was premised on predictions that over the next four years, NSW and Victoria will see a record $110 billion of combined infrastructure investment, which will play a leading role in underpinning the country’s industrial property market.As interest builds for industrial assets from offshore and domestic players, Colliers International’s industrial research and forecast report anticipates further cap rate compression, including secondary assets. According to Luke Dixon, director of research at Colliers International, Sydney and Melbourne look set to be the strongest markets as investors slowly move up the risk curve in the hunt for better yields in Sydney, while pursuing prime and secondary assets, resulting in tighter spreads between the two classes in 2017. “Portfolio transactions continue to gain favour in Melbourne, given that the majority of buyers include institutions looking…

Be the first to comment on "Charter Hall pulls the pin on its $1.1 billion new REIT"

Leave a comment

Your email address will not be published.