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Charter Hall's real estate investment trust (ASX: CQR) plans to strengthen its balance sheet as retailers around the country put plans in place to reopen in May.
CQR has today announced a $275 million institutional placement to strengthen its balance sheet and provide financial flexibility to see it through the Covid-19 financial crisis.
Additionally, CQR intends to raise a further $25 million through a non-underwritten unit purchase plan (UPP).
New shares under the $300 million equity raise will be issued at a fixed price of $2.90 per share, representing a 7.9 per cent discount to the last close price.
Post-placement, the REIT's cash and undrawn debt facilities are forecast to increase to $407 million, while balance sheet gearing is expected to reduce to 22.6 per cent.
Any proceeds from the UPP, capped at $25 million, will be used to reduce debt.
It comes as CQR today confirms it has somewhat avoided the impact of retail closures around the country, with 87 per cent of the trust's tenants still open and trading.
This is because non-discretionary retail makes up the majority of CQR's tenant base, with 51 per cent of the group's monthly gross income originating from anchor supermarket tenants like Coles, BP, Wesfarmers and Aldi.
Sales performance of these anchor tenants was significantly elevated during March due to panic buying, but performance has begun to return to normal levels in April.
Just seven per cent of CQR's monthly gross income was lost form tenants forced to close under government social distancing guidelines.
CQR says those tenants impacted by forced store closures will be supported by federal and state stimulus packages including the Commonwealth JobKeeper program.
For those businesses affected by shutdowns CQR says it will engage with impacted tenants under the National Cabinet Mandatory Code of Conduct to provide rental relief proportional to the reduction in trade.
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