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A consortium led by Charter Hall has acquired a 49 per cent interest in an unlisted trust of 37 exchange properties for $700 million.
The properties in the trust are all leased to Telstra (ASX: TLS), with the telco giant set to retain a 51 per cent interest as well as operational control.
The consortium is owned by three separate buyers; 50 per cent by Charter Hall Long WALE REIT (ASX: CLW), 28.2 per cent by an unnamed wholesale capital partner and 21.8 per cent by the Charter Hall Group (ASX: CHC).
As the flagship investor, CLW has agreed to acquire its stake in the properties for $350 million.
To partially fund this acquisition, as well as its unrelated buyout of the ATO Office Building in Brisbane for $63.6 million, CLW will undertake an equity raising of around $261 million and a further entitlement offer to raise $131 million.
Charter Hall Group managing director and CEO David Harrison says the partnership meets the company's strategy in securing long WALE investments.
"The creation of this partnership continues Charter Hall's successful growth of new partnerships and funds, whist further extending the Group's long WALE investment strategy," he says.
"It also continues the strong relationship we have with Telstra, one of our significant tenant-customers, and demonstrates Charter Hall's leading position in the sale and leaseback market in Australia."
For Telstra, the sale is fruit borne from a plan to realise value in more of its properties.
"When we announced our T22 strategy in June 2018 it included the goal of monetising up to $2 billion of assets to strengthen our balance sheet," says Telstra CEO Andrew Penn.
"Since then we have been working to unlock the true value of some of our assets and today's agreement, when completed, will take us to around the $1 billion mark."
Subject to several conditions being satisfied, the transaction is expected to be completed in the first half of FY20.
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