Fast-growing Charter Hall Group has tapped the market for $140 million to fuel another spate of acquisitions as it raised earnings guidance for the full year after a strong first-half result.
The raising comes as the group readies to roll out a third unlisted industrial fund and lays the groundwork for a major wholesale retail property fund to be seeded with assets of between $100 million and $200 million.
The property fund manager booked a small, 4.3 per cent decline in net profit to $28.6 million for the first half due to the amortisation of the management rights for its previously listed office fund, Charter Hall Office Trust.
The bottom line result masked a 13.1 per cent lift in operating earnings to $38.1 million for the six-month period and 10 per cent rise in operating earnings per security of 12.42 cents, which was driven by strong transaction fees during the half.
The company declared an interim distribution of 11 cents a security, a 12.2 per cent increase on the previous corresponding period.
During the half Charter Hall made $1 billion of acquisitions, the largest of which was its $458 million purchase of Raine Square with partners Canada Pension Plan Investment Board and PSP Investments. It also sold $900 million of property during the six months, while funds under management grew by 6 per cent to $10.5 billion.
Joint managing director David Harrison said about $100 million of the capital raised yesterday through a share placement managed and underwritten by UBS and Macquarie at a 3.6 per cent discount to its last closing price would go towards more acquisitions. Shares stayed in a trading halt during yesterday's raising.
Mr Harrison said that the group had upgraded full-year guidance to operating earnings growth per share of between 7 per cent and 9 per cent, from 7 per cent previously, as a result of the high level of activity the group had experienced during the half.
Fellow joint MD David Southon said demand from institutions for retail assets larger than $100 million had led the group to consider rolling out a shopping centre wholesale fund.
Deutsche Bank analyst Ian Randall said the raising was larger than he expected.