Charter Hall Retail REIT looks to buy back units
The directors of the responsible entity for the Charter Hall Retail REIT (real estate investment trust) have made moves towards an on-market buyback of its units, stating the transaction is in recognition of the REIT’s strong balance sheet.
The buyback is said to be in line with the company’s strategy to increase sustainable earnings and reduce the spread between its unit price and net tangible assets.
The approved initial buyback is for up to $20 million worth of units, with the earliest date the transaction can commence being 23 February, 2011 – the day after the announcement of the REIT’s half year results.
Charter Hall Retail REIT chief executive Steven Sewell said the REIT had recently contracted a number of disposal transactions in the United States and New Zealand, which would release approximately $200 million of equity.
“We believe that allocating some of this equity to a buyback at or around the current unit trading price presents an opportunity to create long-term value for unit holders, while maintaining conservative gearing levels,” he said.
However, the decision to proceed will depend on whether the transactions are completed in time, the REIT’s trading price at the time, and whether there are viable alternative uses for the equity such as potential acquisitions.
“We will continue to monitor the market for Australian investment opportunities, in light of the timing of repatriated equity, and compare those opportunities with the returns resulting from the buyback of units at the prevailing unit price,” Sewell said.
Recommended for you
Global investment manager First Sentier Investors has launched an umbrella brand to provide greater clarity around its shift to a multi-affiliate asset manager encompassing six investment teams.
Janus Henderson has seen intermediary outflows in the second quarter of US$1.2 billion, although its deal with insurer Guardian means overall net flows are US$46.7 billion.
Infrastructure assets are well-positioned to hedge against global uncertainty and can enhance the diversification of traditional portfolios with their evergreen characteristics, an investment chief believes.
Volatility in US markets means currency is becoming a critical decision factor in Australian investors’ ETF selection this year.
