Charter Hall Long WALE REIT Acquisition Announcement
Brisbane City Council Bus Network Terminal
Charter Hall Long WALE REIT (ASX:CLW) (the REIT) is pleased to announce that it has purchased a 50% interest in the Brisbane City Council Bus Network Terminal, a prime industrial social infrastructure asset, in the preeminent Brisbane industrial precinct of Eagle Farm.
The purchase price of $51.25 million (50% interest) reflects a passing yield of 5.0%, with fixed annual rental increases of 2.5%. The property is underpinned by a triple net lease to the Brisbane City Council, with 19.2 years remaining. The acquisition introduces a new government tenant to the REIT's portfolio and as such increases the proportion of income from Government tenants to 20%.
The Brisbane City Council Bus Network Terminal is a 6 hectare site that was developed as a Bus Network Terminal in 2013 and forms an integral component of the Brisbane public system Bus network. The property is located in the tightly held and land constrained prime industrial TradeCoast precinct, which is 8kms from the Brisbane CBD, 1km from the Brisbane Airport and 3kms from the Port of Brisbane.
Avi Anger, Fund Manager for the REIT said “This property is an excellent addition to the CLW portfolio, with a 19.2 year WALE, triple net lease to a Government tenant and is very well located in a prime industrial precinct with excellent accessibility to major motorways and the Brisbane Port. This acquisition continues to demonstrate our ability to secure high quality property on long leases to tenants with strong financial covenants that enhances portfolio quality.”
The property has been jointly acquired with the Charter Hall Education Trust (ASX:CQE).
The REIT has sufficient capacity within its existing debt facilities to fund the acquisition, and the acquisition is not expected to have any material impact on FY19 earnings.
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