Charter Hall Long Wale Reit · ASX:CLW
Charter Hall Long Wale Reit — FY2021 Earnings Presentation
39 slides from Charter Hall Long Wale Reit's earnings presentation, Aug 9, 2021
Slide 1: Charter Hall Long WALE REIT 2021 Full Year Results
2021 Full Year Results Charter Hall Long WALE REIT 9 August 2021 Charter Hall Long WALE REIT 2021 Full Year Results
Slide 2: Acknowledgment of Country
Acknowledgment of Country Charter Hall is proud to work with our customers and communities to invest in, develop and create property assets on land across Australia and New Zealand. We pay our respects to the traditional owners, their elders past and present and value their care and custodianship of
Slide 3: Agenda
Avi Anger Fund Manager Agenda 1. Overview and FY21 highlights 2. Financial performance Scott Martin 3. Operational update and portfolio overview Head of Finance 4. FY22 guidance 5. Additional information Darryl Chua Deputy Fund Manager Cover (clockwise from top left): (1) Kawana Waters Hotel, QLD; (
Slide 4: Overview and FY21 highlights
Charter CharterHall HallLong LongWALE WALEREIT 2021 Full Year Results REIT 1 Overview and FY21 highlights Coles Distribution Centre, Truganina Melbourne, VIC 2021 Full Year Results
Slide 5: Australia's largest diversified long WALE REIT
Overview and FY21 highlights Australia’s largest diversified long WALE REIT Track record of long-term profitable growth Included in the ASX200 and a top 10 listed AREIT 12% compound annual return on equity since IPO1 36% NTA per security growth (6.8% CAGR) since IPO2 3.7% compound annual distributio
Slide 6: Best-in-class diversified real estate portfolio
Overview and FY21 highlights Best-in-class diversified real estate portfolio $5.6 billion portfolio value High quality diversified portfolio Security of income 468 48% 75% properties NNN Eastern 13.2 years leases Seaboard portfolio WALE Insulation from market shocks David Jones, Sydney CBD Charter H
Slide 7: Rental growth generated from Government, multi-national and national blue-chip tenants
Overview and FY21 highlights Rental growth generated from Government, multi-national and national blue-chip tenants within resilient industries Diversified sector exposure Agri-logistics 5% Social infrastructure Woolworths Distribution Centre 15% Dandenong, VIC Long WALE Retail 33% Blue-chip tenants
Slide 8: Attractive distribution yield growth
Overview and FY21 highlights Attractive distribution yield growth Track record of 3.7% pa DPS CAGR since IPO delivering growth $52bn+ market leading platform Distributions per security No less than 4.5% growth (cents) Provides CLW a competitive advantage to unlock value enhancing growth opportunitie
Slide 9: FY21 highlights
Overview and FY21 highlights FY21 highlights1 Financial Portfolio Capital performance performance management Operating EPS of 13.2 year WALE Baa1 29.2 cents per security security and continuity of income assigned investment grade growth of 3.2% over FY20 issuer rating by Moody’s DPS of 29.2 cents $5
Slide 10: Financial performance
Charter CharterHall HallLong LongWALE WALEREIT 2021 Full Year Results REIT 2 Australian Red Cross, Alexandria Sydney, NSW Financial performance 2021 Full Year Results
Slide 11: FY21 full year results snapshot
Financial performance FY21 full year results snapshot Key metrics FY20 FY21 Movement Operating earnings 121.9 159.0 30.4% Operating earnings per security 28.3 29.2 3.2% Distributions per security 28.3 29.2 3.2% Statutory profit 122.4 618.3 405.1% 30 Jun 2020 30 Jun 2021 Movement NTA per security $4.
Slide 12: Financial performance
Financial performance Financial performance – Net property income increase comprises: A$m FY20 FY21 % change – $41.8 million from acquisitions Net property income 176.6 221.6 25.5% – Like for like rental growth from stabilised portfolio of 2.4% Interest income 0.5 0.2 (58.3%) – Operating expenses in
Slide 13: Balance sheet
Financial performance Balance sheet A$m 30 Jun 2020 30 Jun 2021 – $1.6 billion or 52% asset growth due to: – Acquisitions transacted during the year Cash 38.4 77.0 – Net property revaluation uplift of Investment properties 1,852.6 3,092.9 $523 million Equity accounted investments 1,067.2 1,473.4 – $
Slide 14: Capital management
Financial performance Capital management Diversified and well balanced, long term debt maturity profile 150 250 – Balance sheet gearing of 31.4%1 is within the target 25 – 35% range 100 – Assigned first-time Moody’s Baa1 investment 70 200 grade issuer rating 380 26 225 100 300 – Issued $700 million
Slide 15: Operational update and portfolio overview
3 Operational update and portfolio overview Arnott’s Huntingwood Charter CharterHall HallLong LongWALE WALEREIT REIT Sydney, NSW 2021 Full Year Results 2021 Full Year Results
Slide 16: Transaction activity
Operational update and portfolio overview Transaction activity Large scale sale-leaseback and portfolio transaction opportunities driving $1.4 billion of portfolio enhancing investments Long WALE Retail $638 million David Jones, Sydney CBD bp New Zealand Portfolio Myer Bourke Street Mall, Melbourne
Slide 17: Transaction activity (cont.)
Operational update and portfolio overview Transaction activity (cont.) Large scale sale-leaseback and portfolio transaction opportunities driving $1.4 billion of portfolio enhancing investments Social infrastructure Office Industrial & logistics $361 million $310 million $83 million 76-78 Pitt Stree
Slide 18: $5.6 billion diversified portfolio of high quality real estate
Operational update and portfolio overview $5.6 billion diversified portfolio of high quality real estate1 Diversified across geography, real estate sector and tenant industries Key metrics Jun 20 Jun 21 Number of properties 386 468 Property valuation (A$m) 3,630 5,560 Weighted Average Capitalisation
Slide 19: Best in class tenant register
Operational update and portfolio overview Best in class tenant register Strong and stable tenant base of government, ASX-listed and multinational companies Major tenants1 20% 4% 15% 3% 11% 3% 10% 3% 6% 2% 5% 2% 5% 2% 1. Weighted by net passing income as at 30 June 2021, adjusted to include the prope
Slide 20: Blue-chip tenant register
Operational update and portfolio overview Blue-chip tenant register Predominantly investment grade rated tenants1,2 AAA 13% AA+ 6% Not rated AA- 38% 2% A- BBB 32% 1% BBB+ 7% 1. Weighted by net passing income as at 30 June 2021, adjusted to include the property acquisitions announced to ASX on 1 July
Slide 21: Focus on key defensive tenant industries
Operational update and portfolio overview Focus on key defensive tenant industries1 Defensive and resilient to economic shocks Government (20%) Telecommunications (15%) Grocery & distribution (14%) Fuel & convenience (11%) Australian Tax Office, Adelaide 242 Exhibition Street, Melbourne Woolworths D
Slide 22: Long portfolio WALE
Operational update and portfolio overview Long portfolio WALE1 Security of income 13.2 years 16.9% 10.8% 9.4% 9.3% 7.5% 6.0% 5.3% 4.8% 4.0% 4.0% 4.2% 3.9% 3.3% 2.9% 1.7% 2.0% 1.4% 0.5% 0.7% 0.6% 0.4% 0.1% 0.4% Vacant FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32 FY33 FY34 FY35 FY36 FY37 FY3
Slide 23: Sustainability
Operational update and portfolio overview Sustainability Focus on environmental, social and corporate governance performance Environment Social Governance Climate resilience Strong communities Responsible business 2030 – 5.0 NABERS Energy weighted average rating – Net zero target for Scope 1 and 2 e
Slide 24: FY22 guidance
Charter CharterHall HallLong LongWALE WALEREIT 2021 Full Year Results REIT 4 Dandenong, VIC FY22 guidance Woolworths Distribution Centre 2021 Full Year Results
Slide 25: FY22 guidance
FY22 guidance FY22 guidance The REIT reconfirms that based on information currently available and barring any unforeseen events or further COVID-19 impacts, CLW provides FY22 Operating EPS guidance of growth of no less than 4.5% over FY21 Operating EPS of 29.2 cents Guidance of annual Operating EPS
Slide 26: Additional information
Charter CharterHall HallLong LongWALE WALEREIT 2021 Full Year Results REIT 5 Additional information Brisbane Bus Network Terminal Eagle Farm Brisbane, QLD 2021 Full Year Results
Slide 27: NTA reconciliation
Additional information NTA reconciliation NTA per security bridge ($ / security) - As at 30 June 2021, the REIT had a NTA per security of $5.22 reflecting an increase of 16.8% from $4.47 as at 30 June 2020 - Movement driven by a full year net valuation1 uplift of $523 million, partially offset by MT
Slide 28: FY21 portfolio revaluations
Additional information FY21 portfolio revaluations Long WALE Industrial & Social Agri- - FY21 property revaluations resulted in a full year Portfolio valuation (A$m) retail Office logistics infrastructure logistics Total net valuation uplift of $523 million As at 30 June 2020 994 984 1,010 401 241 3
Slide 29: Debt facility summary
Additional information Debt facility summary Diversified with significant covenant Debt summary (A$m) – 30 June 2021 Limit Drawn Maturity Gearing (covenant) ICR2 (covenant) headroom Balance sheet debt A$MTN (7, 8.5 and 10 year tranches) 700.0 700.0 Mar-28 to Mar-31 - $2.4 billion of look through deb
Slide 30: Equity investments with separate property level debt facilities
Additional information Equity investments with separate property level debt facilities Property level debt secured by long leases to investment grade tenants1 Telco Exchanges Portfolio bp Australia Portfolio LWIP Brisbane Bus Terminal 242 Exhibition Street − Portfolio of 36 network critical − Portfo
Slide 31: Geographic and sector diversification
Additional information Geographic and sector diversification1 Eastern seaboard weighted and diversified with sector leading WALE Geographic diversification Real estate sector diversification Northern Territory New Zealand 22.3 year & Tasmania 3% WALE Australian Capital 1% Territory 5% Agri-logistics
Slide 32: Property investment portfolio: Long WALE retail
Additional information Property investment portfolio Long WALE retail – $1.8 billion1 REIT Valuation2 Cap rate3 WALE4 Occupancy4 GLA5 WARR4 Asset State Interest (A$m) (A$m) (years) (%) (sqm) (%) Endeavour Group portfolio (62 properties) Australia wide 49.9% 545.4 4.85% 13.2 100% 174,098 CPI bp Austr
Slide 33: Property investment portfolio: Office
Additional information Property investment portfolio Office – $1.4 billion REIT Valuation1 Cap rate2 WALE3 Occupancy3 NLA4 WARR3 Asset State Interest (A$m) (A$m) (years) (%) (sqm) (%) The Glasshouse, Macquarie Park NSW 50.0% 184.0 4.50% 10.5 100% 35,114 3.4% Westpac Building, Kogarah NSW 50.1% 123.2
Slide 34: Property investment portfolio: Industrial & logistics
Additional information Property investment portfolio Industrial & logistics – $1.2 billion1 REIT Valuation2 Cap rate3 WALE4 Occupancy4 GLA5 WARR4 Asset State Interest (A$m) (A$m) (years) (%) (sqm) (%) Arnott’s, Huntingwood NSW 50.0% 243.5 3.75% 30.5 100% 59,002 CPI + 0.5% National Archives, Chester
Slide 35: Property investment portfolio: Social infrastructure
Additional information Property investment portfolio Social infrastructure – $833 million REIT Valuation1 Cap rate2 WALE3 Occupancy3 Area4 WARR3 Asset State Interest (A$m) (A$m) (years) (%) (sqm) (%) National Telco Exchanges portfolio Australia-wide 24.5% 402.1 3.80% 19.1 100% 347,270 CPI + 0.5% (36
Slide 36: Property investment portfolio: Agri-logistics
Additional information Property investment portfolio Agri-logistics – $302 million REIT Valuation1 Cap rate2 WALE3 Occupancy3 Building area4 WARR3 Asset State Interest (A$m) (A$m) (years) (%) (sqm) (%) Ingham’s portfolio (27 properties) Australia-wide 100.0% 302.3 5.21% 22.3 100% 303,687 2.5% Total
Slide 37: Glossary
Additional information Glossary ASX Australian Securities Exchange Balance sheet gearing Calculated as the ratio of net drawn debt (excluding unamortised debt establishment costs) to total tangible assets, less cash CAGR Compound annual growth rate CLW or the REIT Charter Hall Long WALE REIT DPS Dis
Slide 38: Further information
Additional information Further information Board of Directors Peeyush Gupta AM Ceinwen Kirk-Lennox Glenn Fraser Carmel Hourigan David Harrison Chair & Non-executive Director Non-Executive Director Non-Executive Director Charter Hall Group Office CEO Charter Hall Managing Director & Group CEO Fund ma
Slide 39: Important notice & disclaimer
charterhall.com.au/clw IMPORTANT NOTICE & DISCLAIMER This presentation ("Presentation") has been prepared by and is the sole responsibility of Charter Hall WALE Limited (ABN 20 610 772 202, Australian Financial Services Licence Number 486721) (“Responsible Entity”) as the responsible entity for each
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