Charter Hall Long WALE REIT (ASX:CLW) - Fund Manager, Avi Anger
Fund Manager, Avi Anger
Source: Financial Review
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  • Amid a string of major market announcements, Charter Hall Long WALE (CLW) has locked up its securities
  • Today, the Real Estate Investment Trust (REIT) announced an agreement to buy into 70 bp petrol stations in New Zealand
  • The deal, which will see CLW net a 49 per cent stake in the bp portfolio, will set the trust back NZ$130.8 million (around A$120.13 million)
  • It also told the market it would conduct a $70 million equity raise to partially fund the buy
  • That raise will be split into a fully underwritten $60 million institutional placement and a non-underwritten share purchase plan to raise up to $10 million
  • Charter Hall Long WALE shares last traded for $5.03 on Wednesday, September 9

Amid a string of major market announcements, Charter Hall Long WALE (CLW) has locked up its securities.

Today, the Real Estate Investment Trust (REIT) signed an agreement to buy into 70 bp petrol stations in New Zealand. It also told the market it would conduct a $70 million equity raise to partially fund the buy.

bp Buy

Via the acquisition, CLW will partially buy and lease back 70 petrol station convenience properties to bp.

All 70 stations are triple net leased (NNN), meaning all the property expenses — like real estate taxes, building insurance and maintenance — are bp’s responsibility. Significantly, the deal increases CLW’s proportion of NNN leases to 48 per cent.

The deal, which will see CLW net a 49 per cent stake in the bp portfolio, will set the trust back NZ$130.8 million (around A$120.13 million).

More than half the properties are situated in Auckland, while almost 80 per cent are scattered over metro and commuter metro locations across New Zealand.

The buy brings the number of properties under CLW’s belt to 456 and boosts its property valuation up to $3.75 billion.

Ultimately, however, the buy is subject to the New Zealand Overseas Investment Office approval.

Funding foray

To partially fund the acquisition, Charter Hall Long WALE also intends to raise fresh funding.

First, CLW will give institutional investors the chance to buy in at $4.87 per security to raise around $60 million.

That price is a 3.2 per cent discount to CLW shares’ last closing price, which came in at $5.03 per share. It’s also a 2.9 per cent markdown next to yesterday’s five-day volume-weighted average price of $5.02 per share.

The placement is fully underwritten by J.P. Morgan.

Then, eligible shareholders can participate in CLW’s share purchase plan, where they can subscribe for up to $30,000 in shares to raise up to $10 million. However, this component of the raise is not underwritten.

The issue price for SPP shares will be calculated based on the placement price — $4.87 per share — minus the September quarter distribution of 7.2 cents per security.

The SPP is set to close on Thursday, October 8, while issued securities will begin trading the following week on October 16.

Charter Hall Long WALE shares last traded for $5.03 on Wednesday, September 9.

CLW by the numbers
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