This article is from the Australian Property Journal archive
THE Charter Hall Long WALE REIT (CLW) sold a further $300 million assets in the first half of FY25 as it sought to cut debt, and completed a market security buy-back program, swinging to a profit after posting a heavy loss a year ago.
The trust reported statutory earnings of $51.3 million, compared to a $258.4 million loss in the prior corresponding period (pcp).
Operating earnings slipped from $94 million to $89.8 million, at 12.5c per security, with distributions at the same level. That was 5c lower than the pcp.
CLW reaffirmed its full-year operating earnings per security guidance of 25c and distributions per security guidance of 25c
“CLW has successfully completed its $50 million on market security buy-back program. The portfolio is in an excellent position with 53% of leases in the portfolio being triple-net, occupancy of 99.8% and a weighted average lease expiry of 9.7 years,” said Avi Anger, CLW fund manager.
Like for like property income growth of 3.5% resulted from a mix of fixed and CPI linked annual increases.
The bulk of the $300.4 million in asset divestments were completed during the half was the $225.3 million agri-logistics Inghams portfolio, which it acquired 10 years ago for $171.4 million.
CLW also completed its sales of a 50% share in the Australian Red Cross property in Sydney, at $74 million, and a 24.5% share in a BP service centre in Western Australia’s Armadale for $1.1 million.
It said its $11.5 million in acquisitions were strategic in nature, consolidating adjoining sites to existing assets owned in CLW’s convenience retail hospitality portfolio. They included accommodation leased to Endeavour Group adjoining its existing investment in the Narrabeen Sands Hotel, and a half-share BWS in Crows Nest, also leased to Endeavour Group.
With the completion of the asset divestment program, CLW has balance sheet gearing of 31.8%, within its target range of 25% to 35%, while look-through gearing is 39.0%, down modestly from 41.2% a year ago.
During the period, $310 million of balance sheet debt was refinanced and extended by 2.8 years. The REIT has a weighted average debt maturity of 4.0 years with staggered maturities over a six-year period from FY27 to FY32. Look-through drawn debt is 64% hedged with a weighted average hedge maturity of 1.6 years.
CLW has $266 million of cash and undrawn debt.
CLW had 82% of its portfolio independently valued, with the valuation showing a $15 million or 0.3% reduction after adjusting for divestments and the valuation impact of the upcoming lease expiry at the Telstra Canberra Head Office.
“This reflects stabilisation of asset values over the period with the portfolio weighted average capitalisation rate remaining unchanged at 5.4%,” it said.
Last year, its portfolio was hit with a $306 million write-down, or 4.5%.
