Charter Hall’s $112 million stake in Coles distribution centre

Charter Hall has Retail REIT (CQR) has purchased a 52% interest in Coles’ sole South Australian distribution centre.

The $111.8 million dollar deal will see Coles enter into a 14.5 year lease with QSR for the $215 million purpose-built facility in Edinburgh Park, an industrial area near Adelaide. The site services all of Coles’ South Australian and Northern Territory retail stores.

Coles will have a remaining 14.5 year lease term plus multiple options. The property had been owned by a three fund Charter Hall partnership. CQR acquired the 52% stake after the exit of the CDC syndicate investors. The remaining 48% continues to be held by two Charter Hall Direct managed funds.

The deal boosts their retail portfolio to 13% of CQR’s total holdings.

Charter Hall Retail REIT’s CEO Greg Chubb said it further bolstered their logistics exposure.

“Today’s acquisition continues CQR’s longstanding partnership with Coles, one of our leading Major tenants. This acquisition increases the certainty of income through a long 14.5 year lease, provides growth for CQR investors through fixed rental escalations, and improves the resilience and security of income by further increasing CQR’s exposure to Coles,” Mr Chubb said.

“Today’s acquisition fits in our Long WALE Retail property category and is consistent with CQR’s strategy is to be the leading owner and manager of property for convenience retailers.”

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