Charter Hall Office REIT (CQO) fell in Sydney trading after the trust agreed to sell its U.S. assets for $1.71 billion to entities affiliated with Beacon Capital Partners to focus on Australian properties.
Sydney-based Charter Hall Office slumped 5.2 percent to A$3.13, its biggest decline since September. The company yesterday said it expects net proceeds of about $575 million after transaction costs and the repayment or transfer of debt, and plans to pay them to unit holders.
Charter Hall Group last week won shareholder support to remain the responsible entity and manager of the office trust, defeating a bid by its biggest shareholders to remove it. The group said then it will continue with the sale of the office REIT’s U.S. properties and run the trust as an Australia-only vehicle.
Bank of America Merrill Lynch led the sale process, where a group of 13 shortlisted parties were invited to undertake due diligence and submit formal bids for the purchase of all or some of the U.S. portfolio. Charter Hall Office REIT’s U.S. assets comprise 14 office properties.
After the sale, the REIT will have office assets in Australian capital cities with a book value as at June 30 of A$1.9 billion ($2.04 billion), Chief Executive Officer Adrian Taylor said yesterday.
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