I really hope this is just The Australian trying to fill a slow news day because if Charter Hall are genuinely thinking this is a good idea they have rocks in their head.
Public market investors have firmly voted with their feet re the lack of specialisation and the aggressive asset accumulation of the CHC vehicles versus their peers.
Discount to NTA of CQR vs. RGN? -21% vs -6%. How about CQE vs ARF? Even more egregious at -29% vs +6%!
There is only one way forward for these vehicles in my view. Either they do a merger with their respective peers that trade at materially tighter implied cap rates OR Charter Hall finds some private capital willing to pay a premium to that of listed investors and take the latter out of their misery. I can't see how Charter Hall convinces fresh investors to tip money into a raise to fund growth when their relative performance has been so sub par.
E.g. The shift of CQR to sub regionals and into other assets has been a relative disaster vs Region's steady focus on neighbourhood centres. Total return over last ten years of CQR a palty 79% vs. RGN's at 141%. Massively below the REIT index's return of 145% over that time.
CQE's shift to buy highly dubious social infrastructure rather than stick to child care centres? Almost as bad. CQE total return +191% over last 10 years. Sounds good until you see you could have bought ARF and earned 337%!
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