Food-based strategy central to Charter Hall success

CHARTER HALL Retail REIT has benefited from its food-anchored shopping centre strategy with a forecast rise in end of year earnings boosted by asset sales and acquisitions.

CHARTER HALL Retail REIT has benefited from its food-anchored shopping centre strategy with a forecast rise in end of year earnings boosted by asset sales and acquisitions.

For the six months to December 31, the group reported a 5.7 per cent drop in net profit due to financing costs to $41.7 million, in line with market expectations.

Acting chief executive, Scott Dundas, said the half year distribution was 13?, up 1? on the previous corresponding period. Earnings per security was 13.92?. He said barring unforeseen events, forecast full year earnings were expected to be in the range of 28.75? to 29.25? per unit.

Speaking after the results presentation, Mr Dundas, who is in the acting role since the former chief executive Steven Sewell took up the same position at the new-look Centro Properties this year, said being a food-based group was the more profitable in the current cautious retail environment.

"Having a food-based tenancy has been shown as the best performer and this is reflected in the Australian Bureau of Statistic, where food spending has outgrown discretionary spending," Mr Dundas said.

"Our strategy is to exit, at the right price, our overseas assets and focus on being an Australian-based business. But we have been recycling assets out of the US and New Zealand, only when we can use that cash to buy an Australian asset."

He said the group was still considering a buy back proposal.

Bank of America Merrill Lynch real estate analysts said Charter Hall's operating metrics were stronger than those reported recently by Stockland and Westfield, reflecting the more "convenience" focused portfolio (less Borders/Colorado/fashion, lower occupancy costs for tenants).

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