Charter Hall acquires interest in 3 Assets for $331m
The Charter Hall Long WALE REIT has announced it will acquire interests in 3 assets worth $331M and undertake a capital raising of $242M to fund their acquisition.
The REIT will acquire:
A 15% interest in 242 Exhibition Street, Melbourne for $63.6 million representing a passing yield of 4.5%. The property is predominantly leased to Telstra Corporation Limited (Telstra) as its Global Headquarters, with a weighted average lease expiry (WALE) of 11.5 years;
A 50% interest in The Glasshouse, 45-61 Waterloo Road, Macquarie Park, Sydney for $165.7 million, representing a passing yield of 5.0%. The property is a new office building under construction that is substantially pre-committed to the NSW Government on a 12 year lease, with a three year rental guarantee provided by the vendor over the remaining space; and
A 100% interest in Bunnings Palmerston, Darwin for $41.3 million, representing a passing yield of 5.7%. On completion, the property will be a new, large format store built to Bunnings’ latest standards and will have a new 12 year lease to Bunnings.
Avi Anger, Fund manager of CLW commented: “These acquisitions are modern and well located properties that significantly enhance the CLW portfolio. These properties feature long leases to high quality tenants with 83% of income derived from NSW Government, Telstra and Bunnings Group Limited. The acquisition portfolio WALE is 10.9 years with an attractive weighted average rent review (WARR) of 3.4% p.a. The properties are also predominantly located in the strongly performing Sydney and Melbourne office markets.”
The Equity Raising will be issued at a fixed price of $5.50 per security, which represents a:
4.0% discount to the last close of $5.73 per security on 1 November 2019
3.8% discount to the theoretical ex-rights price of $5.72 per security
5.1% FY20 forecast Operating EPS yield
The balance of the funding for the Acquisitions will be sourced from a combination of existing CLW debt facilities, a new $100 million debt facility with an international lender and debt facility secured at the 242 Exhibition Street wholesale partnership level.
Following the Acquisition and the Equity Raising, the REIT's pro-forma:
balance sheet gearing is 24.7%, at the lower end of CLW's target range of 25 – 35%;
look through gearing is 36.7%; and
NTA per security is $4.22