- Charter Hall Group (CHC) has gone on a $1.25 billion spending spree in the lead up to Christmas
- The property giant is buying 225 BP retail sites and an Arnott’s industrial facility in Sydney
- To help fund the buy, the company’s Long WALE REIT business is tapping investors for $350 million
- Charter Hall has upgraded its earnings guidance in tandem with the announcement of the big buys
- Shares in the company are up almost seven per cent since the news dropped yesterday, currently worth $11.19 each
Charter Hall (CHC) has bought itself a $1.25 billion Christmas present in the form of 225 BP-controlled convenience retail sites and a whole lot of cookies.
The property management giant told the market yesterday it plans to fork out $840 million for a half-stake in BP’s $1.7 billion portfolio of convenience stores.
A further $400 million will be broken out of Charter Hall’s piggy bank to buy famous biscuit-maker Arnott’s Huntingwood industrial facility in Sydney.
The new buildings will be owned by Charter Hall and its managed funds Charter Hall Long WALE REIT (CLW) and Charter Hall Retail REIT (CQR).
To help fund the big buys, the Long WALE REIT business is tapping investors for $350 million through an entitlement offer and share placement.
Charter Hall Managing Director and CEO David Harrison said the BP partnership and building buys are a strategic move from the company.
“The creation of this partnership continues Charter Hall’s growth of new partnerships and funds, whilst further extending the Group’s long WALE investment strategy,” David said.
“Our success in partnering with global multi-national and Australian-based corporates in sale and leaseback activities continues to benefit our tenant customers while providing opportunities for our diverse range of investors and securityholders,” he added.
A cherry on top of this week’s pre-Christmas purchases is an upgraded earnings guidance from Charter Hall on the back of its $38 billion of funds under management. The company now expects a 30 per cent growth in post-tax operating earnings per share (OEPS) for the 2020 financial year, compared to the year before.
Charter Hall’s previous growth expectations were between 18 per cent and 20 per cent.
Charter Hall shares have seen healthy gains since dropping the announcement yesterday morning. Shares are up 1.73 per cent in mid-afternoon trade today, worth $11.18 each. Since yesterday morning, Charter Hall has gained 6.73 per cent and added 70 cents to its share price.