Red Cross Building, Alexandria, NSW Source: Buildcorp
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  • Charter Hall Long WALE REIT (CLW) has announced a fresh capital raise as it grabs 50 per cent interests in four buildings
  • The acquisitions’ total property purchase price is $415.4 million, representing a 5.2 per cent passing yield and a long weighted average lease expiry of 9.2 years and a 3.6 per cent per annum weighted average rent review
  • CLW will raise approximately $250 million at an issue price of $4.65 per security from a completely underwritten 1-for-10.68 accelerated non-renounceable entitlement offer to partly finance the acquisitions
  • The company has now updated its FY21 operating earing per share (EPS) guidance to 29.2 cents per security, reflecting growth of 3.2 per cent over FY20
  • The company is sitting at $4.81 amidst a trading halt, which is planned to be lifted on Wednesday

Charter Hall Long WALE REIT (CLW) has announced a fresh capital raise as it grabs 50 per cent interests in four buildings.

The buildings include the Services Australia Building in Tuggeranong, ACT for $153 million and the Australian Taxation Office (ATO) Building in Box Hill, VIC for $115 million.

Also included in the latest acquisition announcement is the Red Cross Building in Alexandria, NSW for $79.5 million and the ATO Building in Albury, NSW for $42.5 million.

In addition, the REIT has agreed to pay $25.4 million for a 100 per cent stake in an Ampol-anchored long WALE convenience retail property in Redbank Plains, Queensland.

The acquisitions’ total property purchase price is $415.4 million, representing a 5.2 per cent passing yield and a long weighted average lease expiry of 9.2 years and a 3.6 per cent per annum weighted average rent review.

The acquisitions are rented to the Commonwealth Government for 75 per cent of their revenue, raising CLW’s exposure to government tenants from 16 per cent to 21 per cent.

The company also announced a new round of equity raising.

CLW will collect approximately $250 million at an issue price of $4.65 per security from a completely underwritten 1-for-10.68 accelerated non-renounceable entitlement offer to partly finance the acquisitions and their transaction costs.

With approximately 11.5 per cent of CLW’s shares on issue, CLW’s largest shareholder, Charter Hall Group, has agreed to take up its full entitlement, reflecting a pledge of approximately $29 million.

The new raising arrives just five months after it raised $250 million in December of last year.

Citigroup Global Markets Australia and Morgan Stanley Australia will be acting as joint lead managers, bookrunners and underwriters of the entitlement offer.

The company has now updated its FY21 operating earnings per share (EPS) guidance to 29.2 cents per security, reflecting growth of 3.2 per cent over FY20 operating EPS of 28.3 cents per security.

It also announced it will provide FY22 operating EPS guidance of no less than 2.75 per cent growth over upgraded FY21 operating EPS.

“The acquisitions of these modern, long WALE properties reinforces the REIT’s strategy of acquiring high quality properties with long leases to strong tenant covenants,” CLW Fund Manager Avi Anger said.

“The properties are diversified across the eastern seaboard and support the provision of essential government, life sciences and convenience retail services,” he concluded.

The company is sitting at $4.81 amidst a trading halt, which is planned to be lifted on Wednesday.

CLW by the numbers
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