Charter Hall Group announce that its largest industrial fund, the Charter Hall Prime Industrial Fund (CPIF) has been assigned a Baa1 senior unsecured issuer rating by Moody’s Investors Service. This initial rating will provide scope to source non-bank funding to diversify the tenor and source of debt for CPIF.
CPIF is the largest fund within the Charter Hall industrial and logistics portfolio, which is Australia’s second largest industrial platform, with a $4.7 billion portfolio located in key Australian markets. Obtaining a Moody’s investment grade credit rating will drive a number of key benefits for CPIF including increased diversity of funding alternatives with a scalable debt platform and increased tenor to match the long WALE of its property portfolio.
The $2 billion CPIF property portfolio is geographically diverse with a high proportion of “core” assets enhanced via land banks that generate pre-leased new investment assets. The portfolio consists of 44 assets located within close proximity of key infrastructure such as motorway’s, port’s, airport’s and intermodal’s, has high quality earnings underpinned by long term leases to strong tenant covenants, and high quality properties with an average building age of 9.7 years across the portfolio.
Charter Hall’s Joint Acting Chief Financial Officer, Phil Schretzmeyer said: “Following the oversubscribed issuances from the two US Private Placements completed by our listed retail REIT, we are seeking to further enhance the debt funding platform of CPIF to establish a best practice capital structure across our managed funds.
“As a leading property fund manager, Charter Hall is focused on developing capital partnerships that enhance flexibility, duration and scalability of its debt platform, while also continuing to grow sustainable performance for our capital partners.”
Paul Ford, Charter Hall Group Executive, Industrial, explained that the Moody’s rating reflected the Fund’s focus on high quality real estate, long leases and prudent capital management which results in enhanced tenor, flexibility and scalability of CPIF’s debt platform.
“Further strengthening CPIF’s market leading position, the Moody’s Baa1 investment grade credit rating will for the first time allow our industrial and logistics portfolio access to the USPP market which will increase CPIF’s weighted average debt maturity, diversify its debt sources and more closely match CPIF’s asset WALE with debt maturity.”
“CPIF has also been included in the Core MSCI / IPD Australia Wholesale Property Funds Index reflecting the quality of the funds portfolio and recent capital initiatives including setting a target gearing of below 30% and successful capital raisings.
Page 2 of 2 “The combined impact on CPIF of these initiatives positions the fund for solid performance into the future backed by high asset and income quality, increased diversification and prudent financial management, all of which are in line with our strategic principles of enhanced portfolio returns,” Mr Ford added.
About Charter Hall
Charter Hall Group (ASX:CHC) is one of Australia’s leading fully integrated property groups, with over 25 years’ experience managing high quality property on behalf of institutional, wholesale and retail clients. Charter Hall has over $18.0 billion of funds under management across the office, retail and industrial sectors. The Group has offices in Sydney, Melbourne, Brisbane, Adelaide and Perth. The Group’s success is underpinned by a highly skilled and motivated team with diverse expertise across property sectors and risk-return profiles. Sustainability is a key element of its business approach and by ensuring its actions are commercially sound and make a difference to its people, customers and the environment, Charter Hall can make a positive impact for its investors, the community and the Group.