Charter Hall Long Wale Reit · ASX:CLW
Charter Hall Long Wale Reit — Merger or Acquisition (December 2019)
38 slides from Charter Hall Long Wale Reit's merger presentation, Dec 12, 2019
Slide 1: Acquisitions and equity raising
61 Huntingwood Drive, Huntingwood NSW For personal use only Charter Hall Long WALE REIT Acquisitions and equity raising 12 December 2019 Not for release to US wire services or distribution in the United States Mosman, NSW Forestville, NSW
Slide 2: Disclaimer
Acquisitions and equity raising Disclaimer For personal use only Important Notice 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 th
Slide 3: Disclaimer (cont.)
Acquisitions and equity raising Disclaimer (cont.) For personal use only Forward-looking statements This Presentation contains certain “forward-looking statements”, including expectations about the success of the Equity Raising. The words “forecast”, “estimate”, “likely”, “anticipate”, “believe”, “e
Slide 4: Agenda
For personal use only Agenda 1. Transaction overview 5 Appendix 2. Acquisitions overview 8 A. Pro forma balance sheet and portfolio metrics 19 3. Portfolio impact 12 B. Summary of key risks 22 Acquisitions and 4. Sources and uses of funds 15 C. International offer restrictions 29 equity raising 5. E
Slide 5: Transaction overview
Acquisitions and equity raising Transaction overview For personal use only • Charter Hall Long WALE REIT ("CLW") has entered into agreements to acquire: ‒ A 50% interest in a new Charter Hall managed Partnership that will $619m 5.2% acquire a 49% interest in a national portfolio of 225 long WALE con
Slide 6: Transaction overview
Acquisitions and equity raising Transaction overview For personal use only • Including the impact of the Acquisitions and Equity Raising and barring any unforeseen events and no material change in market conditions, CLW is pleased to increase its FY20 Operating EPS guidance: 28.3 cps 5.2% FY20 Opera
Slide 7: Strategic rationale
Acquisitions and equity raising Strategic rationale Acquisition of strategically located properties via sale and leasebacks to two new high quality tenants For personal use only 1 2 Strategic properties in prime locations Long term secure income stream The BP Portfolio comprises 225 convenience re
Slide 8: Acquisition overview – BP Portfolio
Acquisitions and equity raising Acquisition overview – BP Portfolio Portfolio of 225 long WALE convenience retail properties leased to BP with a WALE of 20 years For personal use only Portfolio overview • High quality portfolio of 225 convenience retail properties that are an important part of the B
Slide 9: Acquisition overview – BP Portfolio
Acquisitions and equity raising Acquisition overview – BP Portfolio Geographically diversified portfolio of 225 properties with 87%1 located in metro and commuter metro For personal use only locations QLD 62 properties Metro 35 WA Commuter metro 10 44 properties Non-metro 17 Metro 34 Commuter metro
Slide 10: Acquisition overview – BP Portfolio
Acquisitions and equity raising Acquisition overview – BP Portfolio For personal use only Engadine, NSW Bayside, VIC Kingsway, VIC Marsden Park, NSW Asquith, NSW Ringwood, VIC 10
Slide 11: Acquisition overview – Huntingwood Drive, Huntingwood NSW
Acquisitions and equity raising Acquisition overview – 61 Huntingwood Drive, Huntingwood NSW Strategically located Sydney industrial property with a 32 year lease to Arnott's, an iconic Australian brand For personal use only Property overview • Arnott's primary manufacturing site, producing the majo
Slide 12: Portfolio impact
Acquisitions and equity raising Portfolio impact The Acquisitions increase CLW’s WALE For personal use only Pre-Acquisitions1 Acquisitions Post-Acquisitions Number of properties 158 226 384 Property valuation $2,969m $619m $3,588m Weighted Average Capitalisation Rate (“WACR”) 5.6% 5.2% 5.5% Occupanc
Slide 13: Industry diversification
Acquisitions and equity raising Industry diversification Introduces two new high quality multinational tenants that are household brands For personal use only Major tenants1 39% ASX listed: food/liquor 33% 13% Multinational/ Other 27% ASX listed: 28% banks/non- food/other 23% Government/ 20% governm
Slide 14: Lease expiry profile
Acquisitions and equity raising Lease expiry profile Long portfolio WALE of 14.9 years post Acquisitions For personal use only Portfolio WALE pre- Portfolio WALE post- Acquisitions Acquisitions 13.3 years 14.9 years 24.5% 20.6% 15.2% 13.0% 10.9% 9.8% 10.2% 9.8% 8.2% 7.8% 7.4% 6.5% 5.2% 4.4% 4.4% 4.0
Slide 15: Sources and uses of funds
Acquisitions and equity raising Sources and uses of funds Acquisitions partially funded by a fully underwritten $350 million Equity Raising For personal use only • The REIT will undertake a fully underwritten Placement of $200 million and Entitlement Offer of approximately $150 million • The balance
Slide 16: Equity Raising overview
Acquisitions and equity raising Equity Raising overview Fully underwritten institutional placement and accelerated non-renounceable entitlement offer For personal use only • A fully underwritten equity raising of approximately $350 million to partially fund the Acquisitions and associated transactio
Slide 17: Timetable
Acquisitions and equity raising Timetable For personal use only Event Date Trading halt and announcement of the Acquisitions and Equity Raising Thursday, 12 December Placement and Institutional Entitlement Offer bookbuild conducted Thursday, 12 December Trading of securities recommences on the ASX o
Slide 18: Conclusion
Acquisitions and equity raising Conclusion For personal use only Geographically diversified portfolio of strategic properties that are important to the tenants' operations Long-term acquisition portfolio WALE of 23.4 years increases the REIT's portfolio WALE from 13.3 years to 14.9 years Attra
Slide 19: Appendix A
61 Huntingwood Drive, Huntingwood NSW Appendix A For personal use only 19
Slide 20: Pro forma balance sheet
Acquisitions and equity raising Pro forma balance sheet For personal use only Acquisitions and Equity ($m) Jun-191 Dec-19 revaluations Jun-19 pro forma Raising Cash 6.4 6.4 Investment properties 1,647.9 48.9 198.9 1,895.7 Equity accounted investments 769.2 34.7 210.1 1,013.9 Other assets 16.8 - 16.8
Slide 21: Reconciliation of portfolio metrics
Acquisitions and equity raising Reconciliation of portfolio metrics For personal use only Change from Jun-19 pro-forma Change from Jun-19 pro-forma Jun-191 Dec-19 revaluations (pre-Acquisition) Acquisitions (post-Acquisitions) Number of properties 158 - 158 226 384 Property valuation $2,885m $84m $2
Slide 22: Appendix B
Caringbah, NSW Appendix B For personal use only 22
Slide 23: Summary of key risks
Acquisitions and equity raising Summary of key risks For personal use only Transaction specific risks Co-ownership risk The REIT holds a number of interests in its portfolios with its partners through joint co-ownership arrangements. Acquisition risk Although in many cases, the REIT has control over
Slide 24: Summary of key risks (cont.)
Acquisitions and equity raising Summary of key risks (cont.) For personal use only Other risks These factors may change for a variety of reasons including those set out above in respect of these particular risks. A reduction in the value of any property may adversely affect the value of securities i
Slide 25: Summary of key risks (cont.)
Acquisitions and equity raising Summary of key risks (cont.) For personal use only No guarantee of distribution or capital return Conflicts No guarantee can be given as to the amount of any income or capital return from the securities or the The REIT may engage Charter Hall Holdings Pty Limited, a w
Slide 26: Summary of key risks (cont.)
Acquisitions and equity raising Summary of key risks (cont.) For personal use only Debt facility undertakings and covenants Insolvency The REIT is subject to a number of undertakings and covenants under existing debt facilities, including in In the event of any liquidation or winding up of the REIT,
Slide 27: Summary of key risks (cont.)
Acquisitions and equity raising Summary of key risks (cont.) For personal use only Environmental issues and contamination (continued) A number of joint-ownership agreements also contain: BP Australia Pty Limited (tenant) and the landlord have entered into various arrangements designed to • tag-along
Slide 28: Summary of key risks (cont.)
Acquisitions and equity raising Summary of key risks (cont.) For personal use only There are risks associated with any stock market investment. These include, but are not limited to: Macro-economic • Dilution risk – as the REIT issues securities to new investors, existing securityholders’ proportion
Slide 29: Appendix C
61 Huntingwood Drive, Huntingwood NSW Appendix C For personal use only 29
Slide 30: International Offer Restrictions
Acquisitions and equity raising International Offer Restrictions For personal use only This document does not constitute an offer of new securities of CLW (“New Securities”) in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, and the
Slide 31: International Offer Restrictions (cont.)
Acquisitions and equity raising International Offer Restrictions (cont.) For personal use only Singapore This document has not been registered as a prospectus with the Monetary Authority of Singapore ("MAS") and, accordingly, statutory liability under the Securities and Futures Act, Chapter 289 (the
Slide 32: Appendix D
Minchinbury, NSW Appendix D For personal use only 32
Slide 33: Underwriting arrangements and fees
Acquisitions and equity raising Underwriting arrangements and fees For personal use only J.P. Morgan Securities Australia Limited and UBS AG, Australia Branch will be acting as joint lead managers, bookrunners and underwriters of the Offer (Underwriters). The Responsible Entity has entered into an U
Slide 34: Underwriting arrangements and fees (cont.)
Acquisitions and equity raising Underwriting arrangements and fees (cont.) For personal use only • a contravention by CLW or a CLW group member of the Corporations Act, any of their respective constitutions, tile ASX Listing Rules or any other applicable law; • CLW fails to perform or observe any of
Slide 35: Appendix E
Ringwood, VIC Appendix E For personal use only 35
Slide 36: Glossary
Acquisitions and equity raising Glossary For personal use only ASX Australian Securities Exchange Calculated as the ratio of net drawn debt (excluding unamortised debt establishment costs) to total tangible assets, Balance sheet gearing less cash CLW or the REIT Charter Hall Long WALE REIT DPS Distr
Slide 37: Contact Information
Contact Information For personal use only Avi Anger Darryl Chua Phillip Cheetham Fund Manager Deputy Fund Manager Head of Listed Investor Charter Hall Charter Hall Relations Long WALE REIT Long WALE REIT Charter Hall T: +61 2 8651 9111 T: +61 2 8651 9415 T: +61 2 8651 9214 E: avi.anger@charterhall.c
Slide 38: For personal use only
For personal use only Sydney Head Office Melbourne Brisbane Perth Adelaide Level 20, No.1 Martin Place Level 14, 570 Bourke Street Level 22, Northbank Plaza Level 5, St Georges Square Level 2, 80 Pirie Street Sydney, NSW, 2000 Melbourne VIC 3000 69 Ann Street 225 St Georges Terrace Adelaide SA 5000
Charter Hall Long WALE REIT — Merger or Acquisition (December 2019) on 6ix