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Charter Hall Long WALE REIT (ASX:CLW) (the REIT) today announces its half year results for the period ending 31 December 2021 (1H FY22). Key financial and operational highlights for the period are:
Avi Anger, Charter Hall Long WALE REIT Fund Manager commented:
“During 1H FY22 we successfully completed the acquisition of the ALE Property Group in partnership with Hostplus. This has seen us further improve the quality and diversity of CLW’s real estate portfolio and the resilience of CLW’s income through increasing our exposure to Australia’s leading hospitality operator, Endeavour Group.
In addition, we further increased our exposure to the Industrial and Logistics sector with three high quality acquisitions, two of which were secured off-market. These acquisitions were a direct result of the depth of expertise and ability of the Charter Hall management platform which the REIT benefits from.
“CLW has continued to grow, diversify and improve the quality of the portfolio with a view to providing reliable and growing returns to securityholders. The resilience and strength of the CLW portfolio has been demonstrated in the last two COVID-19 affected years with minimal rent relief required and NTA up 30% to $5.89 from 31 December 2019 levels. CLW continues to offer investors a compelling investment proposition. The long leases in our portfolio have annual increases that are either fixed or inflation linked. 52% of properties in the portfolio are NNN and, based on yesterday’s closing price of $4.86, CLW offers a distribution yield of 6.3%.”
During 1H FY22, CLW completed $923 million of new property acquisitions which contributed to enhancing portfolio quality, sector diversification and strengthening the quality and diversification of tenants. These transactions included:
Overall, the total property portfolio has increased by approximately $1.42 billion to $6.98 billion for the period, driven by $923 million of acquisitions and $532 million in property revaluation uplift.
At the end of the period, the REIT’s diversified portfolio is 99.9% occupied and comprised 549 properties with a long WALE of 12.2 years. The portfolio weighted average capitalisation rate firmed 39 bps during the period to 4.38% as at 31 December 2021.
Strengthening the REIT’s capital position
During 1H FY22, CLW completed $1.5 billion of debt capital management initiatives, including:
• $750 million of bank debt refinanced with an average term extension of 1.5 years
• $355 million of new facilities established with an average term of 6.1 years
• $350 million of increased capacity within existing facilities
• Moody’s Baa1 investment grade issuer rating maintained
Following these capital management initiatives, CLW has a weighted average debt maturity of 5.5 years and a weighted average hedge maturity of 3.6 years as at 31 December 2021. Pro-forma balance sheet gearing of 30.8% remains in the middle of the target 25–35% range and look-through gearing is 38.1%5.
The REIT reconfirms that based on information currently available and barring any unforeseen events, CLW provides FY22 Operating EPS guidance of no less than 30.5 cents, reflecting growth of no less than 4.5% over FY21 Operating EPS of 29.2 cents.
1 Gross valuation uplift less capital expenditure and amortised incentives during the period. Relates to properties which were subject to an independent valuation during the period (all properties other than the Agri-logistics portfolio and the Bunnings Caboolture forward funded development).
2 As at 31 December 2021, adjusted to include the on-completion valuation of the Bunnings Caboolture forward funded development announced to ASX on 9 December 2020, distribution reinvestment proceeds with respect to the December 2021 quarter and the repayment of an A$MTN within the LEP portfolio that occurred post balance date. Unadjusted balance sheet and look through gearing as at 31 December 2021 was 29.2% and 38.2% respectively.
3 All of CLW’s CPI linked reviews occurred during 1H FY22, reflecting the June 2021 CPI of 3.8% and September 2021 CPI of 3.0%
4 Reflects CLW’s implied portfolio purchase price for a 50% interest in ALE Property Group.
5 As at 31 December 2021, adjusted to include the on-completion valuation of the Bunnings Caboolture forward funded development announced to ASX on 9 December 2020, distribution reinvestment proceeds with respect to the December 2021 quarter and the repayment of an A$MTN within the LEP portfolio that occurred post balance date. Unadjusted balance sheet and look through gearing as at 31 December 2021 was 29.2% and 38.2% respectively.
Announcement Authorised by the Board
Click here to view the PDF ASX 1H FY22 Results Announcement
Click here to view 1H FY22 Results Presentation
Click here to view FY22 Interim Financial Report
Click here to view FY22 HY Appendix 4D