In a strategic effort to take advantage of renewed interest in retail property, the company has introduced a new fund that intends to acquire up to $2.5 billion in convenience-based shopping centres. The fund starts with 16 assets valued at $1.35 billion and targets sectors that are performing well due to consistent demand for essential goods. It joins a market where institutional interest could soon increase competition.
Charter Hall has traditionally concentrated on mid-sized shopping centres rather than large malls. Over time, it has been steadily building a portfolio of suburban shopping sites across major cities such as Sydney and Melbourne. These locations, typically anchored by supermarkets and essential services, have shown resilience after the pandemic and are now receiving greater interest from wholesale investors.
The fund has already secured strong equity support, exceeding initial targets. It has gained the backing of 12 institutional investors including domestic superannuation funds. The listed Charter Hall Retail REIT (CQR) has contributed $385 million and holds a 22% stake in the new fund. Charter Hall has added a further $100 million. Four retail centres were shifted from the listed REIT into the new fund, generating $294 million in proceeds and reducing its gearing to a targeted level.
The fund includes $504 million in newly acquired assets such as Chullora Marketplace in Sydney and various sites in Melbourne. These convenience centres cater to essential daily spending, providing the fund with a stable income stream and longer-term growth potential. The focus reinforces ties between retail investments and Charter Hall's established $14 billion industrial and logistics platform and $8 billion office portfolio.
The fund’s launch marks a strategic shift by aligning retail more closely with the company’s other investment sectors. If current momentum continues, the fund could reshape Charter Hall’s retail strategy and inspire similar moves among investors responding to the renewed strength of convenience-based commercial property.
