Corporate Action: Do Not Take Up Unit Purchase Plan for Charter Hall Retail REIT; Our FVE Unchanged

Charter Retail REIT increased its earnings per unit guidance for the full year due to solid underlying operating performance in the first half, and due to acquisitions. We marginally increase our estimated growth in operating earnings per share to 2.3% for the full fiscal year, in line with the new guidance, up from 2.2%. However, we make no change to our fair value estimate of AUD 4.20. Despite raising our earnings estimates for fiscal 2020, in part due to earnings accretion from these purchases, this is offset by the acquisition prices slightly detracting from our valuation. We estimate that the earnings yields on offer are below the group’s long-term cost of capital.