By proceeding you confirm that you are a resident of Australia or New Zealand accessing this website from within Australia or New Zealand and you represent, warrant and agree that:
Charter Hall Long WALE REIT (ASX:CLW) (the REIT) today announces its FY19 results for the period ending 30 June 2019. Key financial and operational highlights for the period are:
Avi Anger, Charter Hall Long WALE REIT Fund Manager commented: “FY19 has been another very strong result for CLW as we continue to deliver on our strategy of actively managing the portfolio to ensure we have properties with long leases to high quality tenants. Our WALE enhancing acquisitions, active approach to leasing and partnership approach with our tenant customers has enabled us to increase the portfolio WALE from 10.8 years to 12.5 years. We have successfully enhanced sector and tenant diversification with the introduction of the Inghams portfolio in the agri-logistics sector and a number of new government, ASX-listed and multinational tenants.”
“We are pleased to announce that the REIT has delivered Operating EPS of 26.9 cents, reflecting 2% growth over FY18 Operating EPS. During the period we upgraded original FY19 Operating EPS guidance, and then delivered at the top end of this upgraded guidance range.”
During FY19, CLW successfully completed $707.0 million of new property acquisitions and $173.7 million of divestments which contributed to extending the portfolio WALE, enhancing sector diversification and strengthening the quality and diversification of tenants. These transactions comprised:
CLW has also secured long term income through the extension of leases in the portfolio.
CLW has agreed terms with Woolworths Group (ASX:WOW) effective from 1 September 2019 to extend the current lease term from its existing expiry date of 31 December 2020 to 31 December 2025. A market incentive will be paid in relation to the extended lease term. The lease otherwise remains on substantially the same terms with the net passing rent being maintained with 3.0% per annum fixed increases.
CLW has also agreed for Woolworths Group to assign the lease to Linfox Australia Pty Ltd (Linfox) effective from 2 September 2019. This assignment is consistent with a new services arrangement between Woolworths and Linfox, to enable Linfox to provide warehouse logistics services to BIG W stores.
Avi Anger, CLW Fund Manager commented “It is pleasing to be able to announce this lease extension. As the next major lease expiry of significance in the portfolio, extending this lease out to December 2025 improves the WALE of CLW and, as a result, the earnings certainty for our investors. This lease extension also demonstrates Charter Hall’s strong relationships with our tenant customers and our ability to work with tenants to achieve mutually beneficial outcomes.”
Overall, the total property portfolio has increased by approximately $608 million to $2.13 billion for the period, driven by $533 million of net acquisitions and $64 million in gross property revaluations.
At the end of the period, the REIT’s diversified portfolio is 99.6% occupied and comprises 118 properties with a long WALE of 12.5 years. The portfolio weighted average capitalisation rate firmed 18 bps during the period to 5.95% as at 30 June 2019.
During FY19, CLW completed several capital management initiatives, including:
$406.3 million of equity raised during the period comprising:
Increased debt capacity by $245.6 million during the period comprising:
Following these capital management initiatives, the REIT has a long- dated hedge maturity of 4.3 years and a weighted average debt maturity of 4.5 years at 30 June 2019. Balance sheet gearing of 27.5% as at 30 June 2019 remains well within the target 25–35% range.
The REIT confirms that barring any unforeseen events and no material change in current market conditions, CLW’s guidance for FY20 is Operating EPS of 28.0 cents per security reflecting Operating EPS growth over FY19 of 4.0%.
The target distribution payout ratio remains at 100% of Operating Earnings.