This article is from the Australian Property Journal archive
CHARTER Hall Long WALE REIT’s portfolio tenancy profile has allowed the trust to weather the COVID storm, recording rental growth and posting increases in annual operating earnings and profit after an acquisitive 12 months.
Only “negligible” relief of 0.2% of net rent was provided to tenants, many of which were able to continue trading in recent months. Portfolio occupancy was 99.8% with a long weighted average lease expiry of 14.0 years, up from 12.5 years.
The trust’s property portfolio value increased by $1.52 billion to $3.63 billion, driven by $1.4 billion of net acquisitions and capex as well as $96 million in revaluations. The weighted average capitalisation rate firmed 53 basis points during the period to 5.42%.
Operating earnings grew 5.2% to $121.9 million, at 28.3 cents per unit. CLW provided FY21 operating EPS guidance of no less than 29.1 cps, reflecting growth of at least 2.8% The target distribution payout ratio remains at 100%.
Avi Anger, Charter Hall Long WALE REIT fund manager, said that despite the uncertainties presented by COVID-19, the trust has been able to successfully deliver earnings per security growth of 5.2%, and diversified the portfolio, improved the quality of assets and extended its portfolio’s WALE.
“CLW has benefited from the sourcing of high quality transactions and the active asset management of the Charter Hall platform, partnering with tenants to extend CLW’s portfolio WALE and increasing underlying asset values,” Anger said.
CLW announced $1.4 billion of new property acquisitions which contributed to extending the portfolio WALE, enhancing sector diversification and strengthening the quality and diversification of tenants. These transactions comprised:
- During the year, the trust made $1.4 billion in acquisitions, taking its portfolio value to $3.6 billion. Major transactions included a 25% interest in the in BP portfolio of 225 convenience retail properties on triple-net leases with a 20-year WALE to BP, and the $349 million purchase of a half stake in a Charter Hall managed partnership that took a 49% interest in a strategic portfolio of 36 Telstra exchange properties with a 21-year WALE and triple net leases.
- Office acquisitions totalled $353.8 million and included a half share in A grade office development The Glasshouse in Macquarie Park, 70% pre-committed to the NSW Government on a 12 year lease, and a 15% interest in Telstra’s global headquarters in the Melbourne CBD.
- The trust also bought a half share in the Arnott’s Biscuits primary manufacturing facility in Huntingwood, and the SUEZ waste transfer station in North Ryde.
- In November, CLW extended its lease to Coles at Perth Airport, the supermarket’s regional distribution centre for Western Australia, from 2028 the end of 2034.
- Following the end of the year, the REIT divested its interest in Waypoint REIT and has available investment capacity of approximately $290 million, a weighted average debt maturity of 3.9 years and a weighted average hedge maturity of 4.4 years.
Pro-forma balance sheet gearing of 24.2% is below the target 25% to 35% range and look-through gearing fell to 37.8%.
