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Charter Hall Long WALE REIT (ASX:CLW) (the REIT) today announces its full year results for the period ending 30 June 2022 (FY22). Key financial and operational highlights for the period are:
Avi Anger, Charter Hall Long WALE REIT Fund Manager commented:
“FY22 has seen CLW continue to grow in a measured way, enhancing portfolio quality and improving asset and tenant diversification. During the year we successfully completed the acquisition of the ALE Property Group in partnership with Hostplus. We also completed three high-quality Industrial & Logistics acquisitions, two of which were secured off-market. From a tenant perspective, we have continued our successful partnership with Metcash, securing a 10-year lease extension at our Canning Vale Distribution Centre in Perth, with an agreement to expand this facility to meet Metcash’s long term operating requirements. Through active management and portfolio curation, the CLW portfolio has grown from $5.6 billion to $7.1 billion and the portfolio quality has been recognised in net tangible assets growing 18.2% over the year. Looking forward, 49% of CLW’s leases are inflation-linked, providing a significant opportunity for strong rental growth in the year ahead.”
During FY22, CLW completed $871 million of net property acquisitions which contributed to enhancing portfolio quality, sector diversification and strengthening the quality and diversification of tenants. These transactions included:
CLW is pleased to announce that it has secured a long-term lease extension with Metcash at Canning Vale in Perth, taking the lease expiry from January 2024 to October 2033. The lease extension continues on the existing terms with annual CPI increases. As part of the lease extension, CLW has also agreed to undertake an expansion of the existing cold storage facilities on the site. Metcash also retains an option to further expand its existing ambient storage facilities at this site. In addition, CLW has committed to install a 1.6MWh solar PV system to improve the environmental credentials of this property and to assist Metcash in meeting its environment and climate targets. Following this lease extension, CLW has no major leases expiries in the portfolio until FY26.
Overall, the total property portfolio has increased by approximately $1.57 billion to $7.1 billion for the period, driven by $871 million of net acquisitions, $670 million in net property revaluation uplift and $25 million of capitalised costs.
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 years. The portfolio weighted average capitalisation rate is 4.35% as at 30 June 2022.
During FY22, CLW completed $1.7 billion of debt capital management initiatives, including:
Following these capital management initiatives, CLW has a weighted average debt maturity of 5.2 years with staggered maturities over a nine-year period. Post balance date, CLW has entered into $650 million of new interest rate swaps, increasing the REIT’s hedged debt from 53% to 77%. CLW has a weighted average hedge maturity of 2.9 years. Pro-forma balance sheet gearing of 29.9% is within the target 25 – 35% range and look-through gearing is 37.1%.
Based on information currently available and barring any unforeseen events, CLW provides FY23 Operating EPS guidance of 28.0 cents and distribution per security guidance of 28.0 cents. Based upon yesterday’s closing price, this represents a 6.4% distribution yield6.
1 Gross valuation uplift less capital expenditure and amortised incentives during the period
2 WALE is pro-forma adjusted for the Metcash lease extension which was executed post 30 June 2022
3 Assumes weighted average FY23 CPI reviews for the REIT’s CPI linked leases of 6.3%. This assumes June CPI of 6.1%, September CPI of 6.3% and December CPI of 7.0%. The majority of the REIT’s CPI-linked leases are linked to September indices
4 Reflects CLW’s implied portfolio purchase price for a 50% interest in ALE Property Group.
5 Guidance includes a floating interest rate based on an average FY23 BBSW rate of 2.7%, comprised of Q1 BBSW of 1.9% and Q2 – Q4 BBSW of 2.9%.
6 Based on CLW FY23 DPS of 28.0c divided by the CLW security price of $4.36 as at 8 August 2022
Announcement Authorised by the Board
Click here to view the PDF ASX Announcement
Click here to view FY22 Results Presentation
Click here to view Appendix 4E and FY22 Financial Report