Charter Hall Long WALE REIT – Acquisitions and FY22 Operating EPS Guidance Upgraderight-arrow
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by Charter Hall Announcements

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Charter Hall WALE Limited as responsible entity of the Charter Hall Long WALE REIT (ASX:CLW) (CLW or the REIT) is pleased to announce that it:

  • has entered into agreements to acquire interests in three properties for a total purchase price of approximately $267 million; and
  • upgrades its previous FY22 Operating EPS guidance of growth of no less than 2.75% to growth of no less than 4.5% over forecast FY21 Operating EPS of 29.2 cents per security1.

Acquisitions

The REIT has entered into agreements to acquire interests in the following properties:

  • a 33.3% tenants in common title interest in the iconic Myer Bourke Street Mall property in Melbourne CBD for $135.2 million;
  • a 100% interest in a distribution centre leased to Simon National Carriers in Carole Park, Brisbane for $83.1 million; and
  • a 100% interest in a Bunnings property in Baldivis, Perth for $49.0 million.

(together, the Acquisitions). The Acquisitions are expected to settle in July 2021.

Further detail on the Acquisitions is included in Appendix A to this announcement.

Avi Anger, Fund Manager of CLW said: “The Acquisitions are strategically located, high quality industrial and logistics and long WALE retail properties that are leased to national tenants. This includes the Myer Bourke Street Mall property in Melbourne, which together with CLW’s existing investment in the David Jones Castlereagh Street store in Sydney, represent two of Australia’s most iconic CBD buildings.

The Acquisitions feature an attractive passing yield of 5.1%, long WALE of 11.2 years and favourable rent review structures and demonstrate our focus on securing long leased assets with strong underlying property fundamentals. The Acquisitions are expected to be materially accretive to prior FY22 Operating EPS growth guidance. As a result, we have upgraded FY22 Operating EPS guidance to growth of no less than 4.5% over forecast FY21 OEPS, continuing our track record of delivering strong earnings and distribution growth for our investors.” 

 

Portfolio impact

 

Pre-Acquisitions2

Acquisitions

Post-Acquisitions

Number of properties

464

3

467

Property valuation

$5,279 million

$267 million

$5,547 million

Occupancy

97.7%

100.0%

97.7%

WALE

13.4 years

11.2 years

13.2 years

WARR3

2.3%

2.3%

2.3%

Rent review type weighting: Fixed / CPI-linked

61% / 39%

41% / 59%

60% / 40%


Following settlement of the Acquisitions and the property revaluations announced on 7 June 2021, the REIT’s unaudited pro-forma NTA per security is expected to be approximately $5.21.4

Funding

The Acquisitions will be funded from the REIT’s existing debt capacity, including the proceeds of the recently completed $200 million issuance of 8.5 year Australian dollar medium term notes. The REIT’s pro-forma balance sheet and look-through gearing including the Acquisitions is expected to be approximately 31.9% and 39.9% respectively.4 

FY22 Operating EPS upgrade

Including the impact of the Acquisitions, and based on information currently available and barring any unforeseen events, CLW is pleased to:

  • reaffirm its FY21 Operating EPS guidance of 29.2 cents per security, representing growth of 3.2%on FY20 Operating EPS; and
  • upgrade its FY22 Operating EPS guidance to growth of no less than 4.5% on forecast FY21 Operating EPS of 29.2 cents per security.

Announcement Authorised by the Board

 

1 Based on current information and barring any unforeseen events

2 As at 30 June 2021

3 CPI is assumed at 1% on average over the forecast period

4 As at 31 December 2020, pro-forma adjusted for previously announced acquisitions (refer Appendix A of Acquisitions and Equity Raising Presentation released to ASX on 18 May 2021), the REIT’s June 2021 property revaluations released to ASX on 7 June 2021 and the Acquisitions

 

Click here to view ASX Announcement & presentation