Charter Hall and Folkestone are now one
Folkestone has recently joined forces with Charter Hall, one of Australia’s leading fully integrated property groups. Together we are excited by the possibilities this creates for our people, customers and investors.
Earlier this year Charter Hall and Folkestone announced that they entered into a Scheme Implementation Agreement for Charter Hall to acquire Folkestone. Folkestone shareholders voted in favour of the Scheme and it became legally effective as of Wednesday, 7 November 2018.
We see this as an excellent fit of two likeminded businesses. We welcome the Folkestone team into Charter Hall and the complementary skills they will bring, as we work together to create value for our customers and investors.
By joining forces, Charter Hall expands its investable universe from office, industrial and retail into the social infrastructure and early learning sector. This sector provides growth opportunities for our customers and provide new and exciting opportunities for our people to enhance their skills.
Charter Hall’s strategy continues to be using our property expertise to access, deploy, manage and invest in core real estate to create value and generate superior returns for our customers.
Who is Charter Hall?
Charter Hall Group (ASX:CHC) is one of Australia’s leading fully integrated property groups, with over $26.4 billion of high quality, long leased property across the office, retail, industrial and social infrastructure sectors. The Group has offices in Sydney, Melbourne, Brisbane, Adelaide and Perth and oversees a portfolio of 768 properties that is more than 5.4 million square metres in size. The ASX100 Group has over 25 years’ experience managing and investing in high quality property on behalf of institutional, wholesale and retail clients.
Charter Hall’s success is driven by our focus on our tenant and investor customers. We look to partner with our tenants, growing with them and helping meet their property needs. We invest alongside our capital partners, creating value and generating superior investment returns together. Our $3.7 billion development pipeline creates new assets for our investors, improving future returns, while creating opportunities for our tenant partners to expand and adapt their businesses. Sustainability and innovation are key elements of our approach. By ensuring our actions are innovative, commercially sound and make a difference to our people, customers and the environment, Charter Hall makes a positive impact for its investors, the community and the Group.
What does this transaction mean for FLK shareholders?
Folkestone shareholders will receive $1.39 cash per share on or around 7 November. This comprises the Bidder Consideration of $1.354 in cash for each Folkestone share and a Special Dividend of $0.036, representing a ~25% premium to the 30-day volume weighted average price of Folkestone shares.
What does this transaction mean for FET shareholders?
Charter Hall Social Infrastructure Limited (formerly Folkestone Investment Management Limited), the responsible entity/manager of FET has been acquired by Charter Hall Group. The name of the responsible entity/manager has changed to Charter Hall Social Infrastructure Limited. The Fund is now known as the Charter Hall Education Trust (ASX:FET).
As part of the transaction, the Trust’s management team lead by Nick Anagnostou, have transferred across to Charter Hall. Effectively the same team continue to manage the trust and its assets, as they have done successfully for many years, complimented by Charter Hall’s existing team.
Further, there is no change to unit trading criteria. You can trade units in the trust under the ASX code FET.
What does this transaction mean for private fund investors?
The trustee/manager formerly known as Folkestone Investment Management Limited, Folkestone Funds Management Limited, Folkestone Seniors Living Management Limited and Folkestone Maxim Asset Management Limited have been acquired by Charter Hall. The management of unlisted property funds is a core competency of Charter Hall.
As part of the transaction, the funds management and property teams lead by Adrian Harrington and Ben Dodwell respectively, have transferred to Charter Hall. Effectively the same teams continue to manage the funds, ensuring minimal disruption to on-going operations.
The name of the trustee/manager and the name of the funds has changed, as shown in the table below.
|Previous Name||New Name|
|Folkstone Education Trust (FET)||Charter Hall Education Trust (FET)|
|Folkestone CIB Fund||Charter Hall CIB Fund|
|Folkestone Maxim A-REIT Securities Fund||Charter Hall Maxim Property Securities Fund|
|Folkestone Maxim A-REIT Securities SMA||Charter Hall Maxim Property Securities SMA|
|Folkestone Real Estate Income Fund at Sydney Olympic Park||Charter Hall Direct Sydney Olympic Park Fund|
|Folkestone Real Estate Income Fund at Altona North||Charter Hall Direct Altona North Fund|
|Folkestone Plumpton Development Fund||Charter Hall Direct Plumpton Fund|
|Folkestone Truganina Development Fund||Charter Hall Direct Truganina Fund|
|Folkestone Wollert Development Fund||Charter Hall Direct Wollert Fund|
|Folkestone SOP Opportunity Fund||Charter Hall Direct SOP Opportunity Fund|
|Folkestone Green Square Hotel Fund||Charter Hall Direct Green Square Fund|
|Folkestone Sydney Airport Hotel Fund||Charter Hall Direct Sydney Airport Fund|
|Folkestone Seniors Living Fund No.1||Folkestone Seniors Living Fund No. 1 (Managed by Charter Hall Group)|
Have any properties been sold?
Both FET’s portfolio of early learning centre properties and the private fund’s property(s) remain unchanged by the transaction.
Has Charter Hall purchased my units in FET or the private funds?
Charter Hall did not purchase units in the private funds. Charter Hall did acquire the 12.0% of FET’s units owned by Folkestone Limited, and this ensures a strong alignment of interest between Charter Hall and FET’s shareholders.
Will I have the same number of units?
There is no change in the number of units you own and no new units have been issued.
Is there a cost in changing the Trustee/Manager?
There is no change to the management fee formula for FET and no change to the management fee for the private funds.
Are there any tax consequences arising from this transaction?
There is no tax event for FET shareholders or private fund investors.
Do I need to do anything?
You do not need to do anything. You still own the same units in FET and/or the private funds and the trust/fund’s name change will automatically be reflected on your holdings.
Where do I go for further Information?
You are welcome to contact us on 03 9046 9946. You can access up-to-date as well as historical information on your investment via the website.
For questions regarding your unitholding, please continue to contact Boardroom. Your login details to their website remain the same.
Boardroom Pty Limited
T: 1300 032 756 or +61 2 8023 5418 (outside Australia).