Charter Hall Long Wale Reit · ASX:CLW
Charter Hall Long Wale Reit — Merger or Acquisition (September 2020)
38 slides from Charter Hall Long Wale Reit's merger presentation, Sep 10, 2020
Slide 1: Acquisition and equity raising
Charter Hall Long WALE REIT Acquisition and equity raising 10 September 2020 Not for release to US wire services or distribution in the United States Greenlane, Auckland Charter Hall Long WALE REIT
Slide 2: Important notice
Acquisition and equity raising Important notice 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 the responsible ent
Slide 3: Important notice (cont.)
Acquisition and equity raising Important notice (cont.) 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”, “expect”, “project”
Slide 4: Agenda
Agenda 1. Transaction overview 5 Appendix 2. bp Portfolio overview 7 A. Pro forma balance sheet 19 3. CLW Portfolio impact 10 B. Summary of key risks 21 Acquisition and 4. Sources and uses of funds 15 C. International Offer Restrictions 29 equity raising 5. Equity raising 16 D. Underwriting arrangem
Slide 5: Transaction overview
Acquisition and equity raising Transaction overview ‒ Charter Hall Long WALE REIT ("CLW") has entered into an agreement to acquire an interest in a portfolio of 70 long WALE NNN convenience retail properties in New Zealand (the “bp Portfolio") NZ$131m 6.25% Property value Initial yield ‒ The bp Port
Slide 6: Strategic rationale
Acquisition and equity raising Strategic rationale Long WALE, NNN portfolio leased to a high quality tenant operating in a resilient sector 1 2 Long term secure income stream Expands partnership with bp bp Portfolio WALE of 20 years, increasing CLW's portfolio WALE from 14.0 Acquisition effected
Slide 7: bp Portfolio overview
Acquisition and equity raising bp Portfolio overview bp leased, NNN convenience retail properties with a portfolio WALE of 20 years Portfolio overview ‒ bp Portfolio comprises 70 convenience retail properties that are integral to the bp fuel and convenience retail distribution network in New Zealand
Slide 8: bp Portfolio overview (cont.)
Acquisition and equity raising bp Portfolio overview (cont.) 78%1 of properties located in metro and commuter metro locations, including 51%1 in Auckland2 Northland Northland Bay of Plenty 1 property 1% 3 properties Regional 1 Metro 2 Auckland Auckland 51% Bay of Plenty Regional 1 Auckland 5% 30 pro
Slide 9: bp Portfolio overview (cont.)
Acquisition and equity raising bp Portfolio overview (cont.) Smales Farm, Auckland Greenlane, Auckland Bombay, Auckland Connect Junction, Auckland Connect Papakura, Auckland Lunn Ave, Auckland Charter Hall Long WALE REIT 9
Slide 10: CLW portfolio impact
Acquisition and equity raising CLW portfolio impact1 Increases CLW’s proportion of NNN leases to 48% Pre-Acquisition2 Acquisition Post-Acquisition Number of properties 386 70 456 Property valuation $3,630m $121m $3,751m Proportion of NNN leases 46% 100% 48% Weighted Average Capitalisation Rate (“WAC
Slide 11: Tenant diversification
Acquisition and equity raising Tenant diversification Expands CLW’s relationship with bp and reinforces the high quality of CLW’s tenant customers… Major tenants1 16% 4% 14% 3% 13% 3% 13% 2% 7% 2% 6% 2% 6% 1% 1. Weighted by net passing income (REIT ownership interest). bp Portfolio NZ$ denominated n
Slide 12: Tenant diversification (cont.)
Acquisition and equity raising Tenant diversification (cont.) … reinforcing CLW’s high proportion of investment grade tenants… Independent credit rating - key tenants1 Non rated tenants include: ‒ Brisbane City Council ‒ Arnott's ‒ Inghams ‒ Metcash AAA ‒ Linfox 12% ‒ Coates Hire Not rated AA+ 24% 4
Slide 13: Tenant resilience
Acquisition and equity raising Tenant resilience … and increasing the REIT’s exposure to the resilient convenience retail sector Portfolio income exposure to key defensive tenant industries1 Government (16%) Grocery & distribution (16%) Convenience retail (14%) Telecommunications (13%) The Glasshous
Slide 14: Lease expiry profile
Acquisition and equity raising Lease expiry profile WALE accretive, with a CLW portfolio WALE of 14.2 years post Acquisition +0.2 years 14.0 years 14.2 years Pre-Acquisition Post-Acquisition 22.2% 21.5% 13.8% 13.6% 11.1% 10.7% 9.7% 9.3% 7.1% 6.5% 6.3% 6.5% 5.3% 4.5% 4.4% 4.8% 4.3% 4.2% 4.5% 3.7% 3.6
Slide 15: Sources and uses of funds
Acquisition and equity raising Sources and uses of funds Acquisition partially funded by $60 million institutional placement and security purchase plan ‒ The REIT will undertake a fully underwritten institutional placement of $60 million and a non-underwritten security purchase plan of up to $10 mil
Slide 16: Equity Raising overview
Acquisition and equity raising Equity Raising overview Fully underwritten institutional placement and non-underwritten security purchase plan ‒ A fully underwritten institutional placement to raise $60 million to partially fund the Acquisition and associated transaction costs ‒ It is intended that e
Slide 17: Timetable
Acquisition and equity raising Timetable Event Date Record date for SPP Wednesday, 9 September Trading halt and announcement of the Acquisition and Equity Raising Thursday, 10 September Placement bookbuild Thursday, 10 September Trading of securities recommences on the ASX Friday, 11 September Settl
Slide 18: Conclusion
Acquisition and equity raising Conclusion bp Portfolio WALE of 20.0 years, increasing CLW’s portfolio WALE from 14.0 years to 14.2 years 100% NNN with annual rent reviews linked to NZ CPI (plus up to 0.5% in the first five years) Geographically diversified with 78% of properties in metro and c
Slide 19: Appendix A
Appendix A Charter Hall Long WALE REIT Greenlane, Auckland
Slide 20: Pro forma balance sheet
Appendix A Pro forma balance sheet Post balance sheet date (A$m) Jun-20 Acquisition and Placement2 Jun-20 pro forma adjustments1 Cash 38.4 38.4 Investment properties 1,852.6 26.6 1,879.2 Equity accounted investments 1,067.2 121.1 1,188.3 Other assets 128.3 (101.6) 26.7 Total assets 3,086.5 (75.0) 12
Slide 21: Appendix B
Appendix B Charter Hall Long WALE REIT Greenlane, Auckland
Slide 22: Summary of key risks
Appendix B Summary of key risks Investors should carefully consider the risk factors described below. Additional risk factors and uncertainties that are not However, the extent of the impact on the REIT’s business, results of operations, financial condition, liquidity and cash known to the Responsib
Slide 23: Summary of key risks (cont.)
Appendix B Summary of key risks (cont.) does not complete and the REIT has raised funds under this Equity Raising, the REIT will need to consider over co-ownership obligations or otherwise could have an adverse effect of the financial conditions or alternative uses for, or ways to return, those fund
Slide 24: Summary of key risks (cont.)
Appendix B Summary of key risks (cont.) These factors may change for a variety of reasons including those set out above in respect of these project prior to commencing development activities. particular risks. A reduction in the value of any property may adversely affect the value of securities in t
Slide 25: Summary of key risks (cont.)
Appendix B Summary of key risks (cont.) This may create a conflict of interest. Related party transactions also carry a risk that they could be default occurs, the lender may require immediate repayment of a debt facility. The REIT may need to assessed and monitored less rigorously than transactions
Slide 26: Summary of key risks (cont.)
Appendix B Summary of key risks (cont.) Insolvency BP Oil New Zealand Limited (tenant) and the landlord have entered into various arrangements designed to In the event of any liquidation or winding up of the REIT, the claims of the REIT's creditors, including any ensure that environmental liabilitie
Slide 27: Summary of key risks (cont.)
Appendix B Summary of key risks (cont.) Additionally, disputes may arise between co-owners and where a dispute cannot be resolved, a GENERAL MARKET RISKS number of joint- ownership agreements provide for the sale of the relevant property in circumstances where a co-owner does not acquire the other c
Slide 28: Summary of key risks (cont.)
Appendix B Summary of key risks (cont.) Consequently the trading price of securities may be influenced by factors non-specific to the REIT and out of the REIT's ability to control. No assurances can be made that the performance of the securities will not be adversely affected by such market fluctuat
Slide 29: Appendix C
Appendix C Charter Hall Long WALE REIT Greenlane, Auckland
Slide 30: International Offer Restrictions
Appendix C International Offer Restrictions This document does not constitute an offer of new stapled securities ("New Securities") of CLW in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, and the New Securities may not be offered o
Slide 31: International Offer Restrictions (cont.)
Appendix C International Offer Restrictions (cont.) United Kingdom Neither this document nor any other document relating to the offer has been delivered for approval to the Financial Conduct Authority in the United Kingdom and no prospectus (within the meaning of section 85 of the Financial Services
Slide 32: Appendix D
Greenlane, Auckland Appendix D Charter Hall Long WALE REIT
Slide 33: Underwriting arrangement
Appendix D Underwriting arrangement J.P. Morgan Securities Australia Limited will be acting as lead manager, bookrunner and underwriter of the Placement (Underwriter). The Responsible Entity has entered into an Underwriting Agreement with the Underwriter in respect of the Placement. The Underwriting
Slide 34: Underwriting arrangement (cont.)
Appendix D Underwriting arrangement (cont.) • a contravention by CLW or a CLW group member of the Corporations Act, any of their respective constitutions, the ASX Listing Rules or any other applicable law; • CLW fails to perform or observe any of its obligations under the Underwriting Agreement and
Slide 35: Appendix E
Appendix E Charter Hall Long WALE REIT Smales Farm, Auckland
Slide 36: Glossary
Appendix E 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 The return of a property or portfolio of properties calculated by dividing the market level of N
Slide 37: Contact information
Appendix E Contact information Avi Anger Scott Martin Darryl Chua Philip Cheetham Fund Manager Head of Finance Deputy Fund Manager Head of Listed Investor Relations Charter Hall Long WALE REIT Charter Hall Long WALE REIT Charter Hall Long WALE REIT Charter Hall Group Charter Hall Group Charter Hall
Slide 38: Office addresses
Sydney Head Office Melbourne Brisbane Perth Adelaide Level 20, No.1 Martin Place Level 14, 570 Bourke Street Level 3, The Annex 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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