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 full year results for the period ending 30 June 2023 (FY23). Key financial and operational highlights for the period are:
Avi Anger, Charter Hall Long WALE REIT Fund Manager commented:
“In FY23 the CLW portfolio delivered a strong net property income increase of 10.6% driven by like-for-like growth of 4.4%, with the balance driven by acquisition activity. The portfolio enjoys strong rental growth as a result of the high proportion of CPI-linked leases, high levels of occupancy and quality of tenants. CLW’s portfolio remains well positioned to continue to deliver strong rental growth, whilst higher interest costs remain a headwind for all AREITs.”
Portfolio curation remains a key strength of the Charter Hall platform. During FY23, CLW completed $223 million of transactions consisting of $114 million1 of divestments and $109 million of income enhancing property acquisitions which contributed to improving portfolio quality, sector diversification and lengthening the portfolio WALE.
– $90.9 million2 acquisition of Geosciences Australia headquarters, a life sciences complex comprising office, specialised laboratory, storage and warehousing for the Commonwealth Government’s technical adviser on all geoscience, geographical and geological matters. Geosciences was acquired in October 2022 on a 7.4% initial yield with a 9.6-year WALE at acquisition and 3% annual fixed rent increases and a net lease structure where the tenant is responsible for all property outgoings.
– $17.9 million3 acquisition of four Endeavour Group leased pubs; the Emu Hotel, SA, the Horse & Jockey, QLD, the Marine Hotel, QLD and the Rainbow Beach Hotel, QLD. Acquired on a blended 5.0% cap rate, the pubs have new 15-year, NNN, CPI-linked leases and further extend CLW’s relationship with Endeavour Group.
– $74 million divestment of Woolworths Distribution Centre, Hoppers Crossing, VIC at the prevailing book value with a 4.50% cap rate and a 3 year lease term remaining.
– $38.3 million divestment of Toll Distribution Facility, Altona North, VIC at the prevailing book value with a 4.75% cap rate and a 2.9 year lease term remaining.
At the end of the period, the REIT’s diversified portfolio is 99.9% occupied and comprised 549 properties with a long WALE of 11.2 years.
100% of properties were independently valued with FY23 property valuations resulting in a net valuation decrease of $363 million over prior book values. The portfolio weighted average capitalisation rate is 4.77% as at 30 June 2023.
During FY23, CLW refinanced and extended the syndicated debt facility for the bp Australia portfolio by four years. CLW’s share of this facility is $225 million.
CLW has a weighted average debt maturity of 4.5 years with staggered maturities over a nine year period from FY24 to FY32. With the exception of an $88 million capital indexed bond maturing in FY24, CLW has no other debt expiries until FY27.
CLW’s drawn debt is 80% hedged on average across FY24 with a weighted average hedge maturity of 2.3 years. Balance sheet gearing of 32.9% is within the target 25 – 35% range and look-through gearing is 40.1%. CLW has $296 million of cash and undrawn debt as at 30 June 2023.
Based on information currently available, including current interest rate and inflation expectations and barring any unforeseen events, CLW provides FY24 operating earnings per security guidance of 26.0 cents and distributions per security guidance of 26.0 cents. Based upon yesterday’s closing price, this represents a 6.5% distribution yield4.
1 Includes three Australian convenience retail properties sold by bp at or above book value, with a combined value of $1.3 million (CLW’s interest)
2 Reflects CLW’s 25% interest
3 Reflects CLW’s 49.9& interest
4 Based on forecast CLW FY24 DPS of 26.0c divided by the CLW security price of $4.03 as at 7 August 2023
Announcement Authorised by the Board
Click here to view the PDF ASX Release
Click here to view the PDF FY23 Results Presentation
Click here to view the PDF Appendix 4E and Full Financial Report