The Charter Hall Long WALE REIT will acquire two properties and has completed the acquisition of a third property for a total investment of $319 million.
The Group has also announced a fully underwritten $250 million institutional placement to partially fund the acquisitions and associated transaction costs.
The acquisitions include;
- a 100% interest in 76-78 Pitt Street, Sydney via a sale and leaseback to Telstra for $281.5 million; and
- a 100% interest in a new Bunnings property to be developed in Caboolture, QLD for $28.1 million.
Avi Anger, Fund Manager of CLW said: “The Acquisitions are high quality, well located and strategic long WALE properties. 76-78 Pitt Street, located in the centre of the Sydney CBD, has been acquired via a sale and leaseback with Telstra Corporation Limited on a long, 10 year triple net lease with fixed annual 2.5% rent increases. The property has a high underlying land value and future optionality.”
“Bunnings Caboolture and the Parap Tavern are located in strong trading areas and identified growth corridors for Bunnings and Endeavour Group. The Acquisitions increase the proportion of triple net leases in the portfolio from 50% to 53% and increase the proportion of fixed rent reviews to 55%, further supporting the REITs secure and growing income. The acquisitions also increase CLW’s exposure to high quality tenants in Telstra, Endeavour Group and Bunnings.”
The capital raising will be issued at a fixed price of $4.65 per security, which represents a -3.3% discount to the last close of $4.81 per security on 8 December 2020 and a -4.3% discount to the 5 day VWAP of $4.86 per security on 8 December 2020; and represents a 6.3% FY21 forecast Operating EPS yield.
The balance of the funding for the acquisitions will be sourced from existing debt facilities and the proceeds from the REIT’s October 2020 capital raising which was intended to raise $10 million, but in light of the strong demand, oversubscriptions were taken and $66.1 million was raised.
CLW is pleased to reaffirm its FY21 Operating EPS guidance of no less than 29.1 cents per security, which represents FY21 Operating EPS growth over FY20 of no less than 2.8%.
Including the impact of the acquisitions, the capital raising, and the previously announced $150 million net valuation increase as at 31 December 2020, the REIT’s pro-forma balance sheet gearing is 23.2%, the look through gearing is 35.1% and the NTA per security is $4.71.
Post the deals and capital raising, the REIT is well positioned with $339 million of further investment capacity.
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