Charter Hall Retail Trust (CQR) and Mercer Super have bought a A$125m (€75m) shopping centre in Sydney’s Eastern Suburbs from Australian property fund manager ISPT.
The listed Charter Hall trust undertook the transaction through its wholesale vehicle, Retail Partnership 6 (RP6), which is 80% owned by Mercer and 20% by CQR.
CQR said it would pay A$25m for its 20% stake in the Eastgate Bondi Junction Shopping Centre.
Ben Ellis, Charter Hall’s retail chief executive officer, said Eastgate Bondi Junction shopping centre, was “an outstanding acquisition”, which would deliver “an attractive 6.1% passing yield”.
“This continues our on-going portfolio curation and further concentrates CQR’s portfolio in major East Coast metropolitan markets. It’s also pleasing to see new incremental wholesale capital investing in convenience retail shopping centres, recognising the attractive nature of this asset class,” Ellis said when announcing the trust’s first-half earnings results.
He said the trust had divested four assets in-line with prevailing book values and it now had cash totalling A$518m available to repay debt and to acquire assets.
“These sales also significantly reduce CQR’s gearing and provide capacity for reinvestment into higher growth opportunities. CQR is also pleased to have reinvested portfolio sale proceeds into the Eastgate Bondi Junction shopping centre, in partnership with RP6.”
He said Eastgate Shopping Centre was one of only three sub-regional shopping centres in Sydney’s Eastern suburbs. The addition of centre would complement its existing Eastern Suburbs Sydney metro assets - Pacific Square, Maroubra and Rockdale Plaza -both jointly owned by Mercer through RP6.
ISPT has owned Eastgate Bondi Junction since 1995 and it is held among more than 80 assets in the diversified portfolio of the A$17.7bn ISPT Core Fund, Australia’s largest wholesale property fund.
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