Charter Hall Cashes out on Two Sites as Share Price Falls (ASX:CQR)

ASX CQR - Charter Hall REITs Share Price

The REIT sector is in an odd spot.

On the one hand, some commercial sites are more in demand than ever before. With a flurry of activity seen in recent weeks.

Yet, on the other hand, concerns about the state of retail continue to plague some. A situation that has left the sector in a volatile state.

The good news though is that transactions are certainly not slowing down.

Charter Hall Retail REIT [ASX:CQR] is proof of that. Confirming the sale of two sites today.

However, the news hasn’t won over the market with shares trading 3.12% lower at time of writing.

Few details, plenty of rumours

Surprisingly, Charter Hall’s announcement was extremely brief. As you can read for yourself:

Charter Hall REIT (ASX: CQR) today announces that the Retail Partnership No. 1 (RP1) has settled Pemulwuy Marketplace and contract to divest West Ryde Marketplace to interests associated with Primewest (ASX: PWG). CQR is a 50% join venture partner in RP1.

Both centres were sold for a combined price of $91.5m at a 1% discount to the December 2019 book value of $92.5 million. CQR’s proportionate interest in the sale is $47.75 million.

CQR FY20 full year results will take place on 13 August 2020.

The lack of any commentary or reason for the sale seems odd. Though I’m sure there were plenty of reasons for the sale.

I can’t imagine it was a move they have made lightly. And because of that, it could suggest that Charter Hall is eyeing off an even bigger deal.

It’s no secret that the company has been linked to both Caltex (now Ampol) and Telstra. Vying to snap up a 49% stake in 250 petrol sites from the former, and a $400 million data centre from the latter.

Suffice to say, both deals are high stakes. And perhaps today’s sale will help give them the capital they need to secure one or both of them.

The details of which, will no doubt lead to more share price movement. Either up or down, depending on the terms.

For now though, all we have is rumours.

Commercial property boom

Broadly speaking though, Charter Hall’s future is in an enviable position.

Commercial property, by the by, is in fairly good spot. With plenty of opportunity for savvy investors to snap up bargains and high-value growth targets.

The tricky part will be beating out the competition.

What that should tell you though is just how healthy the property market still is. Because even with falls in certain sectors, overall things have held up nicely.

That’s despite ongoing fears for the residential market. Which, as it stands, has been tested of late.

However, Catherine Cashmore believes we won’t see a crash. At least, not in the short-term.

Using her cyclical expertise, she sees property booming over the next five years. Before the real crash arrives in 2026. Giving investors a window of opportunity that could net them a fortune if they play their hand right.

Don’t take my word for it though, read all about property cycle in our full report here.


Ryan Clarkson-Ledward,
For Profit Watch