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Charter Hall Long WALE REIT (ASX:CLW) (the REIT) today announced its 1H FY19 results for the period 1 July 2018 to 31 December 2018.
Key financial and operational highlights for the period are:
Avi Anger, Charter Hall Long WALE REIT Fund Manager, commented:
“This strong result further reflects our active asset management approach to deliver a resilient portfolio for long term growth. We are pleased to announce that, following the successful deployment of proceeds from the ATO Adelaide divestment and in conjunction with the successful equity raisings, the REIT has deployed capital into attractive opportunities which improve portfolio diversification, enhance tenant quality and strengthen the long term income resilience for the REIT. On Friday, the REIT announced the successful extension of leases across the recently acquired Inghams portfolio, increasing the WALE from 15.8 years to 24.6 years. The extensions further demonstrate Charter Hall’s strong relationships with our tenant customers and extends the overall portfolio WALE to 12.6 years, which is longer than the WALE at the time of the REIT’s IPO in November 2016.”
Portfolio and WALE improvements through strategic transactions
During the period, CLW successfully completed $492 million of new property acquisitions and $174 million of divestments extending the portfolio WALE to 11.6 years. These transactions comprised of:
“With more than 95% of the portfolio leased to either ASX listed, government / government related or multinational corporate tenants, CLW has focused on strategic transactions which align with the REIT’s long-term strategy of owning high quality properties with long term leases to strong tenant covenants.” Mr Anger added.
Overall, the total property portfolio has increased by approximately $350 million to $1.87 billion for the period, driven by $318.2 million of net acquisitions and $30.7 million in gross property revaluations.
At the end of the period, the REIT’s diversified portfolio remains 100% occupied and comprises 113 properties with a long WALE of 11.6 years, increasing to 12.6 years with the Inghams lease extension mentioned above. The portfolio weighted average capitalisation rate (WACR) as at 31 December 2018 was 6.19%.
Strengthened the REIT's capital position
During 1H FY19, CLW completed several capital management initiatives, including:
Following these capital management initiatives, the REIT has a long dated hedge maturity of 5.0 years and a weighted average debt maturity of 4.2 years at 31 December 2018.
Strategy and outlook
CLW continues to focus on actively managing the portfolio and acquiring assets with long leases to high quality tenants to create value and deliver sustainable and growing returns for investors.
The REIT confirms that barring any unforeseen events and no material change in current market conditions, CLW’s guidance for FY19 Operating EPS remains unchanged from the guidance range announced on 5 December 2018 of 26.8 – 26.9 cents per security, which represents 1.5 – 1.9% annual growth on FY18 Operating EPS.
The target distribution payout ratio remains at 100% of Operating Earnings.
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