Charter Hall Prime Industrial Fund secures USD2.6bn in new equity commitments
Charter Hall Group's (Charter Hall or the Group) flagship USD5.8 billion Charter Hall Prime Industrial Fund (CPIF or Fund) has closed its capital raising significantly oversubscribed, having raised USD2.6 billion since April 2020 in two separate fundraisings.
The capital raising was supported by both existing and 29 new investors, comprising a mix of Australian and offshore investors including super funds, pension plans, sovereign wealth funds, insurance companies, and financial institutions from Asia, the Middle East, Europe and North America.
Charter Hall’s Managing Director and Group CEO, David Harrison, says: “The Group is delighted with the strong level of support we have received despite the economic uncertainty caused by Covid-19. It demonstrates the quality and resilience of the CPIF portfolio and Charter Hall’s reputation, amongst domestic and global investors, as a leading player in the Australian industrial and logistics market.
“The industrial and logistics sector continues to benefit from the rapid growth in online retailing and the focus on supply chain efficiencies. Most institutional investors are significantly underweight the industrial and logistics sector and recognise the potential growth and the attractive long-term, resilient returns available. The deployment of capital remains competitive. Charter Hall’s industrial and logistics platform now exceeds USD11.5 billion with significant growth prospects. Institutions recognise that by investing with Charter Hall, they can secure access to a high quality, growing portfolio of strategically located industrial and logistics assets underpinned by strong tenant covenants and long weighted average lease expiries (WALEs)” says Harrison.
Investors were particularly attracted to CPIF’s high quality portfolio, its 52 per cent exposure to the consumer staples sector, the USD1 billion-plus ‘develop to core pipeline’, and the attractive 5 year forecast total returns, underpinned by an industry leading WALE of 10.6 years, 98.0 per cent occupancy, weighted average annual rental reviews of 2.9 per cent and resilient tenant covenants with 95.0 per cent leased to government, publicly listed or nationally/globally recognised tenants.
The capital raising strengthens CPIF’s balance sheet and provides significant capacity to fund both acquisitions and new develop to core facilities for our growing tenant customer base.
“The capital raising gives the Fund the capacity to grow to in excess of USD8 billion whilst maintaining gearing below its targeted 30 per cent level, cementing its position as Australia’s largest unlisted property fund focussed on the pure play industrial and logistics sector,” says Harrison.
CPIF’s current USD5.8 billion industrial and logistics portfolio comprises 76 assets and 2.6 million square metres of space, with 91 per cent of the portfolio by value in the key land constrained and high performing Eastern Seaboard markets of Sydney, Melbourne and Brisbane.
Charter Hall’s Industrial & Logistics CEO, Richard Stacker, says: “Whether it is through our USD1 billion plus committed development pipeline or through new acquisitions via sale and leasebacks such as the recent ALDI and VISY Glass portfolios, we are providing investors with access to the strong performing and tightly held industrial and logistics sector.
“We continue to leverage our local market knowledge and deep cross-sector tenant customer relationships to curate a portfolio of high quality assets with a large exposure to consumer staples and essential services, at the same time as maintaining a sector leading WALE,” says Stacker.
CPIF has delivered strong annualised total returns of 11.1 per cent over the 12 months to 30 September 2020, 10.6 per cent over three years, 11.1 per cent over 5 years and 11.2 per cent over 10 years, outperforming the MSCI Mercer Australian Core Property Fund Index which has delivered returns of -3.4 per cent, 4.5 per cent, 7.4 per cent and 8.4 per cent respectively.