Charter Hall WALE Limited, the responsible entity (RE) of the Charter Hall Long WALE REIT (CLW), has announced the fund’s acquisition of 50% interests in suburban office properties and one life sciences property for a total purchase price of $415.4 million.
The announcement made to the Australian Securities Exchange (ASX) said the fund would also undertake an offer to raise approximately $250 million to partially fund the acquisitions and associated costs.
Charter Hall said in a separate announcement that the total value of the investment portfolio stood at $780 million and it would be owned by Charter Hall Direct funds together with the Charter Hall Long WALE REIT.
The total purchase price paid by CLW would reflect a passing yield of 5.2% while the acquisitions would feature a long weighted average lease expiry (WALE) of 9.2 years, the announcement said.
CLW’s fund manager, Avi Anger, said that these properties were diversified across the Eastern Seaboard and would support the provision of essential government, life sciences and convenience retail services.
“The acquisitions of these modern, long WALE properties reinforces the REIT’s strategy of acquiring high quality properties with long leases to strong tenant covenants,” he said.
The properties, in which REIT acquired 50% interests in, are three suburban offices, predominantly Commonwealth Government leased, and one life sciences property:
- The Services Australia Building in Tuggeranong , ACT (for $153 million)
- The Australian Taxation Office (ATO) Building in Box Hill, VIC (for $115 million)
- The Red Cross Building in Alexandria, NSW (for $79.5 million)
- The ATO Building in Albury, NSW (for $42.5 million)
In addition, the REIT settled the acquisition of a 100% in an Ampol-anchored long WALE convenience retail property in Redbank Plains, Qld, for $25.4 million.
Charter Hall Group , which is the fund’s largest securityholder with approximately 11.5% of securities on issue, announced it would take up its full entitlement under the offer, aimed at funding the acquisitions and associated transaction costs, which would represent around $29 million.
The entitlement offer would be issued at a fixed price of $4.65 per security, according to the announcement.