Charter Hall Retail has acquired a 100% interest in Sydney's Rockdale Plaza for $142 million.

In a statement released by the ASX, Charter Hall Retail Management announced the deal, which reflects a capitalisation rate of 6.25%. 

The REIT is undertaking a fully underwritten institutional placement to raise $150 million to fund the acquisition and associated transaction costs.

At a glance: 

• Charter Hall Retail has acquired a 100% interest in Sydney's Rockdale Plaza for $142 million, reflecting a capitalisation rate of 6.25%
• The deal was negotiated by JLL's Head of Retail Investments for Australasia Simon Rooney.
• The centre has a total GLA of about 21,331 square metres.

Charter's Hall Retail CEO Greg Chubb said Rockdale Plaza represented an "exceptional" opportunity to acquire a high-performing, convenience-based centre.

"The acquisition aligns with REIT's investment strategy and enhances portfolio metrics to ensure we continue to deliver long-term sustainable growth in earnings for investors," he said.

The centre has a total GLA of approximately 21,331sqm, high occupancy of 99.8% and is anchored by a strong performing Woolworths and Aldi supermarkets, a Big W DDS, together with 7 mini-majors and 46 specialties and convenient and abundant parking for 907 vehicles, driving 4.5 million annual customer visitation (+3.0% year on year). 

The plaza occupies a site of approximately 47,800sqm with excellent exposure to a high level of passing traffic on the Princes Highway. 

JLL’s Head of Retail Investments for Australasia Simon Rooney, who negotiated the deal said he expected more investors to consider the relative value of retail throughout the remainder of 2019.

“While the focus for some institutions has been on disposals, this transaction demonstrates that AREITs will continue to target and selectively acquire quality retail assets as they reweight their portfolios towards higher-growth metropolitan locations," he said.

“Sub-regional shopping centres in the Sydney metropolitan area are tightly held with typically only one opportunity being made available per year.

"Metropolitan-located retail assets are highly sought after given their exposure to strong population growth and rising urban density, particularly in Sydney and Melbourne.

“Investors see value in the retail sector given the recent shift in asset pricing and attractive yields." \

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