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Charter Hall Social Infrastructure Limited (Responsible Entity), as responsible entity of Charter Hall Education Trust (ASX:CQE) (CQE or the Trust) today announces that:
The Acquisition Portfolio comprises a 100% freehold interest in 13 early learning properties including:
The total consideration of $75.5 million for the Acquisition Portfolio reflects a weighted average initial yield of 6.5%1,5.
Key highlights of the Acquisitions include:
Acquisition Portfolio impact
Dec-18 pro forma for Acquisitions
Number of properties
Property investments (A$m)
Weighted average yield
Weighted Average Lease Expiry (“WALE”)
Weighted Average Rent Review (“WARR”)9
The Trust is today undertaking a fully underwritten institutional placement to raise approximately $100 million11 to fund the Acquisitions and associated transaction costs as well as provide balance sheet headroom to finance CQE's current pipeline. The Placement is fully underwritten by J.P. Morgan Securities Australia Limited.
The Placement will be issued at a fixed price of $3.35 per Unit, which represents a:
From the date of issue, Units issued under the Placement will rank equally with existing CQE Units. As these Units will be allotted after the Trust’s record date for the distribution for the three months ending 31 March 2019, new Units issued under the Placement will not be entitled to the CQE’s distribution for the three months ending 31 March 2019. New Units issued under the Placement will be entitled to the distribution for the three months ending 30 June 2019.
Unit Purchase Plan
Eligible Unitholders in Australia and New Zealand will each be invited to apply for up to $15,000 of new Units, free of brokerage and transaction costs, via a UPP. The new Units will be offered at the same price as the Placement of $3.35 per Unit. The UPP is expected to raise up to $5 million and will not be underwritten14. New Units issued under the UPP will rank equally with existing CQE Units from issue and accordingly will not be entitled to the distribution for the three months ending 31 March 2019, but will be entitled to the full distribution for the three months ending 30 June 2019.
Further information on the UPP will be lodged with the ASX and sent to eligible unitholders on or around Tuesday, 2 April 2019.
Capital management initiatives
Alongside the Acquisitions and Placement, CQE has undertaken a number of capital management initiatives to position the Trust for the future. These initiatives include:
Taking into account the impact of the Acquisitions, Placement and barring any unforeseen events and no material change in market conditions, CQE maintains its FY19 forecast distribution guidance of 16.0 cents per Unit and is pleased to provide indicative FY20 distribution guidance of 16.5 – 16.6 cents per Unit implying a distribution growth of 3.5 – 4.0%.
Following the Acquisitions, Placement and capital management initiatives, the Trust's pro-forma December 2018 balance sheet gearing is forecast to be 27.0%.15
Record date for UPP
7pm, Monday, 25 March
Trading halt and announcement of the Acquisitions and Placement
Tuesday, 26 March
Tuesday, 26 March
Announcement of the outcome of the Placement
Wednesday, 27 March
Trading halt lifted and trading of Units recommences on the ASX
Wednesday, 27 March
Settlement of Units under the Placement
Friday, 29 March
Allotment and normal trading of Units issued under the Placement
Monday, 1 April
UPP offer opens and booklet is dispatched
Tuesday, 2 April
UPP offer closing date
Tuesday, 16 April
UPP allotment date
Wednesday, 24 April
Dispatch of holding statements and normal trading of new Units issued under the UPP
Friday, 26 April
All dates and times are indicative only and subject to change. Unless otherwise specified, all times and dates refer to Sydney time.
Additional information about the Acquisition Portfolio, Placement and capital management initiatives including certain key risks are contained in an investor presentation to be released to the ASX today.
To read the document, click on the download link above.