Charter Hall trust rattles the tin for $415m spending spree

Charter Hall Long WALE REIT (ASX: CLW) will acquire a 50 per cent interest in three buildings leased to the Commonwealth Government and a Red Cross-anchored property in Sydney as part of a $415.4 million spend to further diversify its portfolio.

The company will also undertake an entitlement offer to raise approximately $250 million to partially fund the acquisitions and associated transaction costs.

The real estate investment trust (REIT) has entered into agreements to acquire 50 per cent interests in three predominantly Commonwealth Government leased suburban office properties and one modern life sciences property:

• The Services Australia building in Tuggeranong, ACT for $153 million;
• The ATO building in Box Hill, VIC for $115 million;
• The Red Cross building in Alexandria, NSW for $79.5 million; and
• The ATO building in Albury, NSW for $42.5 million.

In addition, the REIT has settled the acquisition of a 100 per cent interest in an Ampol-anchored long WALE convenience retail property in Redbank Plains, QLD for $25.4 million. 

"The acquisitions of these modern, long WALE properties reinforces the REIT's strategy of acquiring high quality properties with long leases to strong tenant covenants," says CLW fund manager Avi Anger.

"The properties are diversified across the Eastern Seaboard and support the provision of essential government, life sciences and convenience retail services."

Post-acquisition, the value of CLW's portfolio will inch closer to $5 billion, with the 464 properties in the trust now worth $4.89 billion.

To fund the purchases CLW will undertake a fully underwritten accelerated non-renounceable entitlement offer to raise approximately $250 million. With a market capitalisation of $2.75 billion, the entitlement offer represents around 10 per cent of CLW's current shares on issue.

CLW's largest shareholder with approximately 11.5 per cent of securities on issue, Charter Hall Group, has committed to take up its full entitlement under the offer, representing a commitment of $29 million.

At a fixed price of $4.65 per security, the offer represents a 3.3 per cent discount to the last close of $4.81 per share.