This article is from the Australian Property Journal archive
CHARTER Hall Long WALE REIT has sold off a 50% interest in Adelaide’s biggest office building, the Australia Tax Office headquarters for $135 million, as it posted a statutory profit of $83.3 million for its first full year of operations.
The trust, which floated late in 2016, posted operating earnings of $58.4 million, and earnings per security and distributions per security were up 3.9% to 26.4 cents.
Net tangible assets per unit were up by 2.9% to $4.05. Balance sheet gearing was 30.6% within the target range of 25% to 35%.
“This proactive management approach is consistent with the REIT’s strategy of providing investors with stable and secure income and targeting both income and capital growth, via an exposure to a high-quality portfolio of long WALE properties,” fund manager, Avi Anger said.
Anger said the sale of the half-share in 12-26 Franklin Street in the Adelaide CBD would reduce CLW’s exposure to the Adelaide office market and release $135 million of proceeds, which the REIT will look to invest over the course of FY19 into high quality, long WALE real estate.
Completed in November 2012, the 36,802 sqm A-grade Franklin Street building is the biggest in Adelaide by net lettable area. It is 92% leased to the ATO by income and is also tenanted by Australia Post, and includes and on-site café and 114 parking spaces.
During FY18, the trust acquired Virgin Australia’s head office at 56 Edmonstone Road in Brisbane for $90.8 million, and an interest in the Bridge Inn Hotel in Mernda, Victoria for $10.1 million.
It also sold the Preston Hotel in Melbourne’s inner north for $4.1 million.
Completion of its $38.7 million Grace Worldwide facility sale will see the proceeds put into a 50% interest in a Brisbane CBD office asset at 40 Tank Street for $46.5 million, bringing the Queensland State Government and Care Park into its portfolio as tenants.
“This acquisition demonstrates our capacity to recycle the Grace asset sale proceeds into a higher quality, longer WALE investment which provides CLW with a stronger tenant quality and a more secure and diverse income stream,” Anger said.
The trust’s portfolio valuation increased by $128 million to $1.53 billion for the period, driven by net acquisitions and $32.2 million in gross property revaluations.
Net tangible assets per security increased 2.9% to $4.05. At the end of FY18, the trust’s 81-asset portfolio remained 100% occupied, with a weighted average lease expiry of 10.8 years, while its weighted average capitalisation rate firmed by 7 basis points to 6.13%.
Australian Property Journal
