Charter Hall Retail (REIT) has announced that its core portfolio anchored of supermarket anchored neighbourhood and sub-regional shopping centres in Australia and Europe remains strong.

For its quarterly operational update, the company reported its core portfolio stands at 98.7 per cent at 30 June 2011, with the same property net operating income (NOI) growth increasing to 3.4 per cent following continued active leasing efforts across its Australian and European markets.

 “The REIT’s core portfolio in Australia and Europe delivered a good result for the quarter with solid income growth, speciality rent growth of 5.2 per cent and continuing high occupancy. Of particular note is the healthy sales productivity of specialty retailers across the Australian portfolio coupled with a relatively low occupancy cost base,” Steven Sewell, CEO Charter Hall Retail REIT, said:

According to the company, Australia’s “healthy sales growth” was underpinned by the supermarket anchors which recorded comparable sales growth of 4.7 per cent, specialty sales growth of 0.9 per cent and lower than benchmark average specialty occupancy cost of 8.4 per cent.

Overall Australian portfolio occupancy remained solid at 98.8 per cent and same property NOI growth of 3.8 per cent for the period was ahead of expectations, with the recently acquired portfolio of eight Woolworths anchored shopping centres included in the portfolio occupancy.
In Australia, 62 renewal and new specialty lease transactions were completed during the quarter, resulting in average rental rate growth of 5.6 per cent; comprising growth of 7.6 per cent for renewals and 2.6 per cent. for new lease deals. Productivity of the specialty retailers in the portfolio recorded average sales levels of approximately $8,100 per square metre for the portfolio’s mainly non-discretionary category tenants.
“The result confirms the strength of the REIT’s non-discretionary predominantly grocery anchored shopping centre portfolio, and the benefits flowing from our strategy to re-weight to the Australian market,” Sewell added.