Charter Hall (ASX:CQR) share price lifts after latest update

A positive revaluation, a new acquisition, and increased dividends sees the REIT’s share price rise.

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The Charter Hall Retail (ASX: CQR) share price is in the green. At close of trade, shares in the real estate investment trust (REIT) were trading for $3.94 – up 1.55%. For context, the S&P/ASX 200 Index (ASX: XJO) is 0.09% higher.

The REIT comes into focus after announcing a valuation update, a new acquisition, and distributions for the second half of the financial year.

Let’s take a closer look at today’s announcement.

Why the Charter Hall share price is rising

Positive revaluation

According to the statement, Charter Hall says it has reassessed 64% of its portfolio by gross value and this segment has appreciated by 4.1% – or $143 million. The average capital rate of the portfolio has decreased from 6.03% to 5.81%. Net tangible assets per security have increased from $3.77 to $4.02.

Charter Hall CEO, Greg Chubb, said:

Today’s portfolio valuations demonstrate the resilience and attractiveness of our Convenience Retail portfolio. Our shopping centre portfolio has proven its resilience through the challenges of the last 12 months with strong occupancy, rent collection and retail sales growth. This is now being reflected in asset valuation gains.

Latest acquisition and second half dividend

As well, Charter Hall declared it has bought the Butler Central Shopping Centre in Western Australia, from Woolworths Group Ltd (ASX: WOW), for $51.2 million – a 6.0% cap rate. Besides Woolworths stores, another ASX retailer in the centre is Reject Shop Ltd (ASX: TRS).

The transaction will settle in July 2021 and is being funded using existing debt facilities.

Finally, Charter Hall says it will pay a dividend of 12.7 cents per security to shareholders for the H2 of FY21. This is an increase on the first half of the financial year, which was 10.7 cents per security.

Charter Hall share price snapshot

Over the past 12 months, the Charter Hall share price has increased 14%. However, before the COVID market crash, Charter Hall shares were trading for $4.94 each. Its 52-week high is only $4.08.

For a sense of how devastating the pandemic was for the REIT, between 5 March and 23 March 2020, its share price fell 43.1%. Fourteen months later it has still not fully recovered.

Charter Hall has a market capitalisation of $2.26 billion.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Woolworths Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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