Food-anchored shopping centres proved a success over apparel for Charter Hall Retail REIT, which reported a 62 per cent rise in net profit to $85.2 million for the year to June 30.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
During the past year the group sold its last European assets and undertook development of centres across the portfolio.
The net profit, reported on Wednesday, was in line with analysts' forecasts. The results included the profits from the discontinued business.
For the year, the distribution was 27.3 cents up 1.9 per cent on the previous year, with the portfolio value standing at $2 billion, up 20 per cent on June 2013.
Charter Hall Retail fund manager Scott Dundas said the past year had seen the group buy four new supermarket anchored centres at an average yield of 7.6 per cent and completed 294 leasing transactions, with specialty store rent growth of 2.6 per cent for the year.
Mr Dundas forecast operating earnings for the 2015 financial year of between 29.6 cents and 30 cents per unit, up about 7 per cent on the 2014 earnings of 27.75 cemts per unit.
He told analysts at a briefing that market conditions were good for the food-based tenants and that the group would look at buying centres worth up to $100 million. He added that incentives and leasing spreads remained competitive in the centres.
“Despite the tougher trading conditions, ongoing strength in food retailing has resulted in a significant uplift in demand for neighbourhood and sub-regional centres during 2014,’’ Mr Dundas said.
He said the group was also in discussion with supermarket chain Aldi to join Woolworths and Coles at some of its centres.
Charter Hall Retail owns 89 shopping centres across the country, including a number of Bunnings Warehouse centres, the Gordon shopping centre in Sydney’s north shore and the Rosebud Plaza, which it bought from CFS Retail last year.
Brokers at Macquarie said the 2014 operating earnings per unit of 29.6 ¢ was within 1 per cent of their 29.4 cents forecast.
‘‘Growth of 3 per cent in 2014 was driven by significant acquisitive activity in the year coupled with a swap restructure offset by dilution from the sale of the Mile End homemaker centre and Polish portfolio,’’ the Macquarie brokers said.
‘‘Charter Hall Retail remains a relatively defensive proposition with the majority of net property income underpinned by Australian neighbourhood shopping centres. The outlook statement is for modest growth however, in part reflecting the difficult backdrop for retail, in particular developments as expected.’’
