Charter Hall Long Wale Reit · ASX:CLW
Charter Hall Long Wale Reit — FY2020 Earnings Presentation
40 slides from Charter Hall Long Wale Reit's earnings presentation, Aug 7, 2020
Slide 1: Charter Hall Long WALE REIT 2020 Full Year Results
For personal use only Charter Hall Long WALE REIT 2020 Full Year Results 7 August 2020 Charter Hall Long WALE REIT
Slide 2: 2020 Full Year Results Agenda
For personal use only 1. FY20 full year highlights 2. Financial performance 3. Operational update and portfolio overview 2020 Full Year Results Agenda 4. FY21 earnings guidance 5. Additional information Avi Anger Scott Martin Darryl Chua Fund Manager Head of Finance Deputy Fund Manager Charter Hall
Slide 3: FY20 full year highlights
FY20 full year highlights For personal use only Coles Distribution Centre, Perth Charter Hall Long WALE REIT
Slide 4: FY20 highlights
FY20 full year highlights FY20 highlights1 Delivered EPS growth of 5.2% over FY19 For personal use only Financial Portfolio Capital performance performance management Operating EPS of 28.3 cents 14.0 year WALE $1.4 billion up 5.2% over FY19 up from 12.5 years at 30 June 2019 of new investments incre
Slide 5: Delivering on strategy
FY20 full year highlights Delivering on strategy High quality, diversified portfolio delivering stable and secure long term income For personal use only – Average 18.7 year WALE on new acquisitions Increase portfolio WALE – Including leasing extensions, increased portfolio WALE from 12.5 years to
Slide 6: Summary of COVID-19 impact
FY20 full year highlights Summary of COVID-19 impact Negligible impact to FY20 operating earnings as a result of CLW’s defensive, non-discretionary income profile For personal use only 1 – SME tenants 0.4% of net rent – Negligible relief of 0.2% of net rent provided to tenants in FY20 28.3c 2 – Port
Slide 7: Reliable and growing distributions
FY20 full year highlights Reliable and growing distributions CLW has delivered consistently growing distributions per security each year since IPO For personal use only 28.3c 26.9c 26.4c 25.4c 1 FY17 FY18 FY19 FY20 1. Reflects the FY17 DPS of 16.2 cents for the period from IPO to 30 June 2017, which
Slide 8: Strong track record since IPO
FY20 full year highlights Strong track record since IPO Step change in portfolio quality with resilient increasing distributions For personal use only IPO Jun 17 Jun 18 Jun 19 Jun 20 Tripled portfolio scale $1,253 million $1,397 million $1,525 million $2,133 million $3,630 million Doubled NNN ex
Slide 9: Financial performance
Financial performance For personal use only The Glasshouse, Macquarie Park, Sydney Charter Hall Long WALE REIT
Slide 10: FY20 results snapshot
Financial performance FY20 results snapshot For personal use only Key metrics FY19 FY20 Movement Statutory profit $69.6m $122.4m $52.8m Operating earnings $70.8m $121.9m $51.1m Operating earnings per security 26.9 cents 28.3 cents 5.2% Distributions per security 26.9 cents 28.3 cents 5.2% 30 June 20
Slide 11: Financial performance
Financial performance Financial performance For personal use only – Net property income increase driven by: A$m FY19 FY20 % change – $53.0 million from new acquisitions during FY20 Net property income 108.3 176.6 63.1% – Like for like rental growth of 2.6% Interest income 0.3 0.5 50.0% – Operating e
Slide 12: Balance sheet
Financial performance Balance sheet For personal use only – NTA per security of $4.47 representing a 9.3% increase from 30 June 2019 A$m 30 Jun 2019 30 Jun 2020 – $1.2 billion or 62% asset growth due to: Cash 6.4 38.4 – Acquisitions transacted during the year Investment properties 1,328.4 1,852.6 –
Slide 13: Debt and hedging summary
Financial performance Debt and hedging summary For personal use only – Balance sheet gearing of 24.2% is below the target 25 – 35% range – Established a total of $0.8 billion of new balance sheet and joint venture debt facilities, with major Australian and international banks, to support investment
Slide 14: Portfolio composition
Financial performance Portfolio composition Tenant covenant strength and long WALE leases are a feature of the portfolio For personal use only Equity investments with separate property Balance sheet investments3 level finance facilities1 – Highly rated, investment grade tenants2 in defensive sectors
Slide 15: Operational update and portfolio overview
Operational update and portfolio overview For personal use only Woolworths Distribution Centre, Dandenong, Melbourne Charter Hall Long WALE REIT
Slide 16: Acquisition growth
Operational updates and portfolio overview Acquisition growth $1.4 billion of strategic investments enhancing WALE, covenant strength and NNN exposure For personal use only Long WALE Retail Telco Exchanges Office Industrial & Logistics $468.0m (34%) $349.0m (25%) $353.8m (26%) $213.9m (15%) BP Mosma
Slide 17: Asset management
Operational updates and portfolio overview Asset management Track record of creating value through active asset management and strong tenant relationships For personal use only December 2017 5 year extension at Howards Road, Beverley, Adelaide, increasing the remaining lease term to 11.9 years Febru
Slide 18: Portfolio snapshot
Operational updates and portfolio overview Portfolio snapshot1 $3.6 billion portfolio of high quality real estate For personal use only Key metrics Jun 19 Jun 20 Number of properties 118 386 Property valuation (A$m) 2,133 3,630 Weighted Average Capitalisation Rate (WACR) 5.95% 5.42% Occupancy 99.6%
Slide 19: Tenant diversification
Operational updates and portfolio overview Tenant diversification Strong and stable tenant base of government, ASX-listed and multinational companies For personal use only Major tenants1 17% 4% 14% 3% 14% 3% 11% 2% 8% 2% 6% 2% 6% 1% 1. Weighted by net passing income as at 30 June 2020 (REIT ownershi
Slide 20: Tenant resilience
Operational updates and portfolio overview Tenant resilience 75% of tenants independently rated investment grade… For personal use only Portfolio credit quality – key tenants1 Non rated tenants include: ‒ Brisbane City Council ‒ Arnott's ‒ Inghams ‒ Metcash AAA ‒ Linfox 12% ‒ Coates Hire Not rated 2
Slide 21: Tenant resilience (cont.)
Operational updates and portfolio overview Tenant resilience (cont.) …with a high proportion providing essential services For personal use only Portfolio income exposure to key defensive tenant industries1 Government (17%) Grocery & distribution (16%) Telecommunications (14%) Pubs and bottle shops (
Slide 22: Lease expiry profile
Operational updates and portfolio overview Lease expiry profile1 Long dated portfolio WALE of 14.0 years For personal use only – Portfolio WALE of 14.0 years, up from 12.5 years as at 30 June 2019 +1.5 years 12.5 years 14.0 years 22.2% 13.7% 11.1% 9.7% 6.5% 6.5% 4.6% 4.9% 3.8% 3.9% 3.9% 3.1% 1.6% 1.
Slide 23: Sustainability
Operational updates and portfolio overview Sustainability For personal use only Climate resilience Responsible business Climate change adaption Taskforce for Climate-related Financial Disclosure (TCFD) alignment underway Climate change adaption plans prepared for industrial properties in NSW, VIC, S
Slide 24: FY21 earnings guidance
FY21 earnings guidance For personal use only BP Caringbah, Sydney Charter Hall Long WALE REIT
Slide 25: FY21 earnings guidance
FY21 earnings guidance FY21 earnings guidance For personal use only – The REIT confirms that based on information currently available (including with respect to the COVID-19 pandemic) and barring any unforeseen events, CLW provides FY21 Operating EPS guidance of no less than 29.1 cents per security,
Slide 26: Additional information
Additional information For personal use only 1. REIT snapshot 2. NTA reconciliation 3. Portfolio revaluations 4. Debt facility summary 5. Secured debt investments 6. Geographic and sector diversification 7. Portfolio transformation since IPO 8. Property investment portfolio 9. Glossary 10. Contact i
Slide 27: REIT snapshot
Additional information REIT snapshot Charter Hall Long WALE REIT is an Australian Real Estate Investment Trust that invests in high quality real estate For personal use only assets leased to corporate and government tenants on long leases Diversification National portfolio diversified across industr
Slide 28: NTA reconciliation
Additional information NTA reconciliation FY20 summary For personal use only – As at 30 June 2020, the REIT had NTA per security of $4.47 NTA per security bridge reflecting an annual increase of 9.3% from $4.09 as at $0.39 30 June 2019 $0.22 $0.23 $4.47 $4.09 – Movement driven by net valuation uplif
Slide 29: Portfolio revaluations
Additional information Portfolio revaluations FY20 valuation summary For personal use only – FY20 property revaluations resulted in a net valuation Portfolio valuation A$m uplift of $96 million as at 30 June 2020 over prior book values As at 30 Jun 2019 2,133.3 Net transactions1 1,386.5 – Including
Slide 30: Debt facility summary
Additional information Debt facility summary Diversified with significant covenant headroom For personal use only – $1.7 billion of look through debt facilities across Debt summary (A$m) – 30 June 2020 Limit Drawn Maturity Gearing ICR2 (covenant) (covenant) CLW’s head trust and joint venture partner
Slide 31: 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 For personal use only Telco Exchanges Portfolio BP Portfolio LWIP Brisbane Bus Terminal 242 Exhibition Street – Portfolio of 36 network – Por
Slide 32: Geographic and sector diversification
Additional information Geographic and sector diversification1 Eastern seaboard weighted and diversified across various real estate sectors For personal use only Geographic diversification Real Estate sector diversification Australian Capital Territory Northern Territory & 3% Tasmania 2% Agri-logisti
Slide 33: Property investment portfolio: Industrial & logistics
Additional information Property investment portfolio Industrial & logistics – $1.1 billion For personal use only REIT Valuation1 Cap rate2 WALE3 Occupancy3 GLA4 WARR3 Asset State Interest (A$m) (A$m) (years) (%) (sqm) (%) Arnott’s, Huntingwood NSW 50.0% 198.9 4.50% 31.5 100% 59,002 CPI + 0.5% Nation
Slide 34: Property investment portfolio: Long WALE retail
Additional information Property investment portfolio Long WALE retail – $1.0 billion For personal use only REIT Valuation2 Cap rate3 WALE4 Occupancy4 NLA5 WARR4 Asset State Interest (A$m) (A$m) (years) (%) (sqm) (%) LWIP portfolio (60 properties) Australia wide 49.9% 435.1 5.71% 14.1 100% 170,943 CP
Slide 35: Property investment portfolio: Office
Additional information Property investment portfolio Office – $1.0 billion For personal use only REIT Valuation1 Cap rate2 WALE3 Occupancy3 NLA4 WARR3 Asset State Interest (A$m) (A$m) (years) (%) (sqm) (%) The Glasshouse, Macquarie Park NSW 50.0% 166.4 5.00% 9.1 100% 35,114 3.5% Westpac Building, Ko
Slide 36: Property investment portfolio: Telco Exchanges
Additional information Property investment portfolio Telco Exchanges – $349 million For personal use only REIT Valuation1 Cap rate2 WALE3 Occupancy3 Building area4 WARR3 Asset State Interest (A$m) (A$m) (years) (%) (sqm) (%) Telco Exchanges portfolio (36 properties) Australia-wide 24.5% 349.0 4.44%
Slide 37: Property investment portfolio: Agri-logistics
Additional information Property investment portfolio Agri-logistics – $241 million For personal use only REIT Valuation1 Cap rate2 WALE3 Occupancy3 Building area4 WARR3 Asset State Interest (A$m) (A$m) (years) (%) (sqm) (%) Ingham’s portfolio (27 properties) Australia-wide 100.0% 240.5 6.44% 23.3 10
Slide 38: Glossary
Additional information 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 The return of a property or portfolio of properties calculated
Slide 39: Contact information
Contact information For personal use only 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 Ch
Slide 40: 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
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