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Charter Hall Long WALE REIT announces $619 million of acquisitions

Charter Hall Long WALE REIT (ASX: CLW) went into a trading halt today to announce more property acquisitions. 

It was only a month ago that it announced $331.5 million of property acquisitions including a 15% interest in the Telstra Corporation Ltd (ASX: TLS) headquarters building. 

Today, the real estate investment trust (REIT) announced that it would acquire a 50% interest in a new managed partnership that would acquire a 49% interest in a portfolio of 225 long weighted average lease expiry (WALE) convenience retail properties leased to BP valued at $420 million representing a passing yield of 5.5% – this represents the majority of BP’s owned convenience retail properties in Australia. The lease structure has annual uncapped CPI rental increases. 

It’s also going to acquire a 50% interest in Arnott’s manufacturing site in Huntingwood, Sydney for $199 million, which represents a passing yield of 4.5% with a lease term of 32 years. The lease has annual rental increases of uncapped CPI plus 0.5%. 

This will be funded partially by a fully underwritten $350 million capital raising. 

It also announced it has independently valued 92 of the REIT’s 158 properties, resulting in a $83.5 million net valuation uplift, or 2.9% in percentage terms, over prior valuations. 

The REIT has upgraded its FY20 operating earnings per share (EPS) guidance to 28.3 cents per share, representing 5.2% growth over FY19. 

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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