Charter Hall takes loss on Bowen Hills sale but books valuation uplifts

Charter Hall Long WALE REIT announced today the results of December portfolio valuations, the divestment of 56 Edmondstone Road, Bowens Hills, Brisbane and the December quarter FY22 distribution.

Charter Hall had 95% of the Long WALE REIT portfolio by independently valued as at 31 December 2021 revealing a $529m, or 8.1% uplift on prior book values.

The revaluations increase the overall portfolio value from $6,511 million to $7,040 million during the six month period to 31 December 2021. The portfolio’s weighted average cap rate has compressed 37bps from 4.78% to 4.41%.

The unaudited impact of the valuations announced today are expected to increase CLW’s estimated pro-forma June 2021 NTA per security from $5.111 to $5.85, a $0.74 or 14.4% increase.

Charter Hall also announce that it has contracted to sell 56 Edmondstone Road, Bowen Hills, Brisbane for net price of $70.9 million.

Acquired by Charter Hall in December 2017 for $90m (from another Charter Hall Fund), the A-Grade asset comprises 12,427sqm of net lettable area across three low rise office buildings and was fully leased to Virgin Australia with an 8.4 year WALE.

Following the initial impacts from the COVID pandemic, Virgin Australia was placed into administration and vacated the building in September 2020.

Charter Hall managed to re-lease Building C to Fujifilm (2,865m2), for a term of 8 years, commencing in September 2021 and have since agreed to dispose of the property.

The sale will see a $20m capital loss on the acquisition price. Settlement is expected to occur on 22 December 2021.

Knight Frank and Colliers were appointed to sell the asset on behalf of Charter Hall.

Post divestment of this property, CLW’s portfolio valuation and average cap rate as at 31 December 2021 is forecast to be $6,982 million and 4.39% respectively.

CLW declared the distribution for the quarter period ending 31 December 2021 of 7.62 cents per security.

CLW will report the REIT’s Half-Year FY22 Results on Tuesday, 8 February 2022.

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About Warwick Petschack

Warwick has over 25 years of property investment and management experience. Principally responsible as Managing Director for Capital Management Australia and Joint Managing Director for Chauvel Capital Partners and Editor of Australian Property Markets News.

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