Charter Hall Long Wale Reit · ASX:CLW
Charter Hall Long Wale Reit — H1 FY20 Earnings Presentation
36 slides from Charter Hall Long Wale Reit's earnings presentation, Feb 10, 2020
Slide 1: 2020 Half Year Results
242 Exhibition Street, Melbourne, VIC Charter Hall Long WALE REIT 2020 Half Year Results 10 February 2020
Slide 2: Agenda
1. Company and FY20 Half Year Highlights 2. Financial Performance 3. Operational Updates and Portfolio Overview Agenda 4. FY20 Earnings Guidance 5. Additional Information Avi Anger Scott Martin Darryl Chua Fund Manager Head of Finance Deputy Fund Manager Charter Hall Charter Hall Charter Hall Long W
Slide 3: Company and FY20 half year highlights
Company and FY20 half year highlights Australian Taxation Office, Adelaide, SA Charter Hall Long WALE REIT 2020 Half Year Results 3
Slide 4: Company Highlights
Company and FY20 half year highlights Company Highlights Charter Hall Long WALE REIT is an Australian Real Estate Investment Trust that invests in high quality real estate assets leased to corporate and government tenants on long-term leases National portfolio diversified across industrial & logisti
Slide 5: Relative performance
Company and FY20 half year highlights Relative performance CLW has outperformed the S&P ASX200 AREIT index over the last three years Total shareholder return1 CLW S&P ASX200 AREIT Accumulation Index 38.6% 28.7% 24.1% 19.6% 16.2% 13.2% One year Two years Three years 1 Represents compound annual retur
Slide 6: FY20 half year highlights
Company and FY20 half year highlights FY20 half year highlights1 Financial Portfolio Capital performance performance management Operating EPS / DPS of 14.0 14.5 year WALE 23.8% gearing2 cents up from 12.5 years at 30 June 2019 below target range of 25% – 35% On track to deliver upgraded $3.6bn portf
Slide 7: Delivering on strategy
Company and FY20 half year highlights Delivering on strategy High quality portfolio delivering stable and secure long-term income Increased portfolio WALE… Enhanced sector diversification1… 2.2 30 June 2019 31 December 2019 14.5 Agri-logistics Agri-logistics 11% 7% 0.3 Telco Industrial Industrial Ex
Slide 8: Financial Performance
Financial Performance Arnott's, Distribution Facility, Huntingwood, Sydney, NSW Charter Hall Long WALE REIT 2020 Half Year Results 8
Slide 9: FY20 half year results snapshot
Financial Performance FY20 half year results snapshot Key metrics 1H FY19 1H FY20 Movement Statutory profit $26.3m $80.5m $54.2m Operating earnings $31.1m $52.2m $21.1m Operating earnings per security 12.9 cents 14.0 cents 1.1 cents Distributions per security 12.9 cents 14.0 cents 1.1 cents 30 Jun 2
Slide 10: Financial performance
Financial Performance Financial performance • Net property income increase includes $21.9 million from new A$m 1H FY19 1H FY20 % change acquisitions during the reporting period Net property income 48.1 74.9 55.7% • Operating expenses increase attributed to portfolio growth Interest income 0.1 0.2 35
Slide 11: Balance sheet
Financial Performance Balance sheet • NTA of $4.52 representing a 10.5% increase from A$m 30 Jun 2019 31 Dec 2019 30 June 2019 Cash 6.4 10.1 • $885 million (46%) asset growth due to: Investment properties 1,328.4 1,703.7 ‒ Acquisitions transacted during the half year; and Equity accounted investment
Slide 12: Debt and hedging summary
Financial Performance Debt and hedging summary • Pro forma1 balance sheet gearing marginally below 25 – 35% range • Established a new $100 million balance sheet debt facility and three new joint venture debt facilities to support acquisition activity Look through debt maturity profile (A$m) Key metr
Slide 13: Operational Updates and Portfolio Overview
Operational Updates and Portfolio Overview Exhibition Street Telco Exchange, Melbourne, VIC Charter Hall Long WALE REIT 2020 Half Year Results 13
Slide 14: Acquisition growth
Operational Updates and Portfolio Overview Acquisition growth Strategic transaction activity enhancing WALE, covenant strength and NNN exposure Acquisitions – $1.4 billion Telco Exchanges Long WALE Retail Telstra Portfolio – $349.0 million BP Portfolio – $420.1 million Haymarket Street, Sydney CBD E
Slide 15: Acquisition growth (cont.)
Operational Updates and Portfolio Overview Acquisition growth (cont.) Strategic transaction activity enhancing WALE, covenant strength and NNN exposure Acquisitions – $1.4 billion (cont.) Office Industrial & Logistics Long WALE Retail $353.8m $198.9m $41.3m 242 Exhibition Street, Melbourne The Glass
Slide 16: Asset Management
Operational Updates and Portfolio Overview Asset Management Track record of creating value through active asset management 5 year extension at Howards Extended leases at Newton Road and 6.6 year lease extension at Coles Road, Beverley, Adelaide, Davis Road properties in Wetherill Park, Distribution
Slide 17: Asset Management (cont.) - Coles lease extension
Operational Updates and Portfolio Overview Asset Management (cont.) Major lease extension agreed with Coles during the period Case Study: Coles Distribution Centre, Perth Airport Property overview • Prime industrial property built in 2008 comprising ambient warehouse, temperature controlled and free
Slide 18: Portfolio snapshot
Operational Updates and Portfolio Overview Portfolio snapshot1 $3.6 billion portfolio of high-quality real estate Jun 2019 Dec 2019 Number of properties 118 384 Property valuation (A$m) 2,133 3,588 Weighted Average Capitalisation Rate (“WACR”) 5.95% 5.49% Occupancy 99.6% 99.8% Weighted Average Lease
Slide 19: Tenant diversification
Operational Updates and Portfolio Overview Tenant diversification Strong and stable tenant base anchored by government, ASX-listed and multinational corporates Major tenants1 17.0% 4.4% 14.0% 3.3% 13.7% 2.9% 11.3% 2.2% 7.5% 2.1% 6.3% 1.9% 5.9% 1.3% 1 Weighted by net passing income as at 31 December
Slide 20: Geographic and sector diversification
Operational Updates and Portfolio Overview Geographic and sector diversification Eastern seaboard weighted and diversified across various real estate sectors Geographic diversification1 Real Estate sector diversification2 Australian Capital Territory Northern Territory & Tasmania Agri-logistics 3% 2
Slide 21: Lease expiry profile
Operational Updates and Portfolio Overview Lease expiry profile1 Long dated portfolio WALE of 14.5 years • Portfolio WALE of 14.5 years, up from 12.5 years as at 30 June 2019 Jun-19: Dec-19: 12.5 years 14.5 years 22.6% + 2 years 16.8% 10.8% 9.7% 6.5% 6.2% 4.5% 4.8% 4.3% 3.9% 3.8% 1.6% 1.5% 0.8% 0.8%
Slide 22: FY20 Earnings Guidance
FY20 Earnings Guidance BP Caringbah, Sydney, NSW Charter Hall Long WALE REIT 2020 Half Year Results 22
Slide 23: FY20 earnings guidance
FY20 Earnings Guidance FY20 earnings guidance • The REIT confirms that barring any unforeseen events and no material change in current market conditions, CLW’s guidance for FY20 Operating EPS remains unchanged from the guidance announced on 12 December 2019 of 28.3 cents per security, reflecting Ope
Slide 24: Additional Information
Additional Information • Portfolio revaluations • Sustainability • Debt facility summary • Portfolio income quality • Property investment portfolio • Glossary • Contact information 242 Exhibition Street, Melbourne, VIC Charter Hall Long WALE REIT 2020 Half Year Results 24
Slide 25: Portfolio revaluations
Additional Information Portfolio revaluations FY20 first half valuation summary • 1H FY20 property revaluations resulted in a Portfolio valuation A$m valuation uplift of $83.3m As at 30 Jun 2019 2,133.3 • The portfolio WACR as at 31 Dec 2019, including Net transactions1 1,363.1 all prior announced t
Slide 26: Sustainability
Financial Performance Sustainability Climate resilience Responsible business 100% net zero target Taskforce for Climate-related Financial in Scope 1 and Scope 2 emissions by Disclosure (TCFD) alignment underway 2030 from base buildings in Charter Hall Commencing with a review of climate operational
Slide 27: Debt facility summary
Financial Performance Debt facility summary Debt facility summary as at 31 December 2019 • $1.5 billion of look through debt facilities across Debt summary (A$m) Limit Drawn Maturity CLW’s head trust and joint venture partnerships Balance sheet debt Syndicated debt facility 480.0 466.7 Feb-23 • Weig
Slide 28: Portfolio income quality
Operational Updates and Portfolio Overview Portfolio income quality 75%1,2 of the portfolio is leased to government and investment grade tenants (or subsidiaries thereof) Tenant credit ratings1,2 AAA 12% Not rated AA+ 25% 4% AA- 3% B+ 2% BBB A- 14% 30% BBB+ 10% 1 Weighted by net passing income as at
Slide 29: Property investment portfolio: Industrial & Logistics
Additional Information Property investment portfolio Industrial & Logistics – $1,032m REIT Valuation1 Cap rate2 WALE3 Occupancy3 GLA4 WARR3 Asset State interest (A$m) (%) (years) (A$m) (sqm) (%) Arnott’s, Huntingwood NSW 50.0% 198.9 4.5% 32.0 100% 59,002 CPI +0.5% National Archives, Chester Hill NSW
Slide 30: Property investment portfolio: Office
Additional Information Property investment portfolio Office – $1,027m1 REIT Valuation2 Cap rate3 WALE4 Occupancy4 NLA5 WARR4 Asset State Interest (A$m) (A$m) (years) (%) (sqm) (%) The Glasshouse, Macquarie Park NSW 50.0% 165.7 5.0% 9.5 100% 35,298 3.5% Westpac Building, Kogarah NSW 50.1% 111.7 5.3%
Slide 31: Property investment portfolio: Long WALE Retail
Additional Information Property investment portfolio Long WALE Retail – $945m1 Valuation2 Cap rate3 WALE4 Occupancy4 Building area5 WARR4 Asset State REIT interest (A$m) (%) (years) (A$m) (sqm) (%) LWIP portfolio (60 properties) Australia wide 49.9% 428.2 5.7% 14.6 100% 169,771 CPI BP portfolio (225
Slide 32: Property investment portfolio: Telco Exchanges
Additional Information Property investment portfolio Telco Exchanges – $349m Valuation1 Cap rate2 WALE3 Occupancy3 Building area4 WARR3 Asset State REIT interest (A$m) (%) (years) (A$m) (sqm) (%) Telco Exchanges portfolio (36 properties) Australia-wide 24.5% 349.0 4.4% 20.6 100% 347,270 CPI +0.5% To
Slide 33: Property investment portfolio: Agri-logistics
Additional Information Property investment portfolio Agri-logistics – $235m Valuation1 Cap rate2 WALE3 Occupancy3 Building area4 WARR3 Asset State REIT interest (A$m) (%) (years) (A$m) (sqm) (%) Ingham’s portfolio (27 properties) Australia-wide 100.0% 235.1 6.4% 23.7 100% 303,687 2.5% Total / weight
Slide 34: Glossary
Additional Information Glossary ASX Australian Stock Exchange Calculated as the ratio of net drawn debt (excluding unamortised debt establishment costs) to total tangible assets, Balance sheet gearing less cash The return of a property or portfolio of properties calculated by dividing the market lev
Slide 35: Contact Information
Contact Information Avi Anger Scott Martin Darryl Chua Phillip Cheetham Fund Manager Head of Finance Deputy Fund Manager Head of Listed Investor Charter Hall Charter Hall Charter Hall Relations Long WALE REIT Long WALE REIT Long WALE REIT Charter Hall T: +61 2 8651 9111 T: +61 3 9903 6169 T: +61 2 8
Slide 36: Office addresses
Sydney Head Office Melbourne Brisbane Perth Adelaide Level 20, No.1 Martin Place Level 14, 570 Bourke Street The Annex, Level 3 Level 5, St Georges Square Level 2, 80 Pirie Street Sydney, NSW, 2000 Melbourne VIC 3000 275 George Street 225 St Georges Terrace Adelaide SA 5000 Brisbane QLD 4000 Perth W
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