Charter Hall Exchanges on Telstra Exchanges
Charter Hall announced this week that it had acquired an interest in a portfolio of 37 telecommunication exchange properties in conjunction with other Charter Hall Funds worth $1.43bn.
Telstra will retain a 51% interest in a property trust that holds the properties with the Charter Hall Long WALE REIT holding 24.5%, a wholesale capital partner holding 13.8% and the Charter Hall Group holding 10.7%.
For the Long Wale REIT, the total acquisition cost of $350m will be funded through a combination of debt and a fully underwritten equity raising of approximately $261 million, with the proceeds also being applied to the acquisition of the ATO building in Upper Mount Gravat as reported here.
The Exchange portfolio will provide its investors with a a net passing yield of 4.4% underpinned by triple net leases to Telstra with a weighted average lease expiry (WALE) of 21.0 years and CPI+0.5% annual rent reviews.
In June 2019, Firmus Capital snapped up the Brisbane CBD Telstra Exchange at 280 Elizabeth Street for $57 million. That property was offered fully leased on a 7 year triple net leaseback arrangement offering a net annual income of $3.18 million and reflected a yield of circa 5.57%.