Charter Hall focuses on consumer staples with new fund
Charter Hall’s latest addition to its $2.9 billion direct property division launched yesterday, with a new fund that focuses on properties leased to producers and distributers in the everyday consumer staples market.
The Charter Hall Direct Diversified Consumer Staples Fund (DCSF) is the first consumer staples themed property in the Australian unlisted property fund market. The fund has a forecast income yield of 6.89 per cent.
Consistent demand for consumer staples combined with the difficulties competitors face when breaking into the industry made Charter Hall believe that it is a strong choice of sector for a new fund to focus on.
“Leading consumer staples companies have operated for decades through many economic. They tend to dominate the industry they operate in with high barriers of entry to new competitors,” Charter Hall group executive – global investor relations, Richard Stacker, said.
“These features create a resilience to their earnings, providing an excellent tenant for landlords looking for security of cashflows from the underlying properties.”
Stacker cited the low elasticity of demand for consumer staple products, as needs for food, petrol and everyday household items remains reasonably stable, as benefits to investing in this sector of the property market.
He also pointed out that demand for such items grows in line with population growth, suggesting that sales will remain strong.
While online shopping is impacting the retail sector, Charter Hall does not believe that this diminishes the attractiveness of consumer staples properties as an investment.
Their managing director and chief executive officer, David Harrison, said at the launch that a large portion of online sales still occur through a retailer, rather than from a producer directly.
He also said that retail shopping centres offer more to customers than just physical stores. He believes that the food and entertainment options offered within centres help make shopping at them, rather than online, appealing.
The diversified portfolio consists of predominately Australian companies. The fund’s initial investments are in properties leased to leading companies such as Viva Energy and Bunnings, and retailers and producers of smallgoods including Hans and Primo.
The DCSF joins Charter Hall’s extensive stable of property funds, including their Direct Office fund and Diversified Property Trust.
Recommended for you
Almost 70 per cent of asset managers are planning to control costs via product rationalisation, according to a global survey by Northern Trust, as they seek to offer clients a best-in-class experience.
Fund managers should work collaboratively with data providers to minimise greenwashing risks in their products as a positive ESG score can be a “gamechanger” for a fund’s demand with advisers.
Asset manager Janus Henderson has made two acquisitions in the ETFs and emerging markets space as it takes strategic steps to meet client needs.
Self-reporting issues to ASIC could lead to a reduced charge for a fund manager but it may not exempt them from enforcement action altogether, according to ASIC chair Joe Longo.
