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Charter Hall (the Group) and Hostplus have extended their wholesale investment partnership creating the Long WALE Investment Partnership 2 (LWIP2), to acquire a portfolio of three established hotels currently operated by the ALH Group (ALH).
The acquisition is consistent with Charter Hall’s strategy to create institutional grade investment opportunities with long leases to strong credit quality tenants with leading market positions.
Charter Hall’s Hospitality Fund Manager, Ben Ellis, said:
“We are pleased to continue our strong investment partnership with Hostplus and further enhance our relationship with Woolworths’ businesses the ALH Group, Dan Murphy’s and BWS.
“The acquisition reflects an initial yield of 6.28% and will deliver new 20 year triple net leases consistent with the investment criteria of LWIP2. The properties are well located within regions set to benefit from forecast five year population growth as well as an improving tourism sector supported by a low Australian dollar,” Mr Ellis added.
The portfolio comprises three high quality hospitality assets:
Post the portfolio acquisition, the Charter Hall managed LWIP series has a total portfolio value of $810 million and comprises 62 properties predominately located across Australian metropolitan areas. The acquisition of the portfolio will increase the sector weighted average lease expiry from 18.9 years to 19.0 years with occupancy to remain at 100%. The establishment of LWIP2 provides additional capacity to grow the sector.
Charter Hall’s Head of Retail, Greg Chubb explained that the Group would continue to explore additional investment opportunities in the Hospitality sector.
“Our capabilities to access, deploy, manage and invest capital means that we are able to create industry leading property investment funds that provide our investors with stable and growing income streams. In particular, our wholesale unlisted funds have ranked as the highest performing unlisted property funds in Australia according to IPD/MSCI.
“The LWIP2 investment partnership with Hostplus delivers a stable income stream secured by high quality investment products that offer access to long leased assets with strong tenant covenants in growing markets. We will continue to be acquisitive of these assets where the underlying fundamentals meet the investment criteria,” Mr Chubb added.