Transferring Coverage of No-Moat Charter Hall Retail REIT, AUD 4.20 FVE Unchanged.

We have maintained our no-moat, Standard stewardship, and medium fair value uncertainty ratings for Charter Hall Retail REIT following the transfer of coverage to a new analyst. We have also maintained our AUD 4.20 fair value estimate and, at the current market price of AUD 4.57, continue to believe the units are overvalued. Our fair value implies a fiscal 2019 P/E ratio of 14 and a distribution yield of 6.8%, versus a market price-based P/E ratio of 15 and yield of 6.2%. As a non-tax-paying trust, distributions are unfranked. Our forecasts assume an EPS CAGR of just 1.0% over the next decade, with only inflation like annual rental growth of around 2%, offset somewhat by rising interest costs.