Charter Hall Long WALE REIT (ASX:CLW) just boosted its dividend. Here's what you need to know

The REIT updated investors with its half yearly results this morning.

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Key points

  • Charter Hall released its half-year results in an update today 
  • The company grew earnings and property valuations this half, also increasing its distributions by 5%
  • In the last 12 months, the Charter Hall share price has gained almost 5% 

The Charter Hall Long WALE REIT (ASX: CLW) share price is bumping higher today, trading 1.54% in the green at $4.935 at the time of writing.

The real estate investment trust (REIT) released its half-year results for the period ending 31 December 2021 in an update today, detailing several investment highlights in the process.

As part of its progress this half, the property giant also increased its dividend by 5% on the same time last year. Let's take a closer look.

Charter Hall share price rises as operating earnings lift 6%

The company outlined several financial and operational highlights for the period, including:

  • Operating earnings of $97.8 million, or 15.31cps, up 5.6% on the prior corresponding period (pcp)
  • Statutory profit of $589.6 million for the half
  • Distributions of 15.24 cents per share, up 5.1% on pcp
  • Net tangible assets (NTA) of $5.89, up 12.8% from $5.22 on pcp
  • A $523 million net property valuation uplift – 8.3% higher than for 1H FY22.
  • Balance sheet gearing of 30.8% and look through gearing of 38.1%

What else happened this quarter for Charter Hall?

During the half, Charter Hall completed $923 million of new property acquisitions. The company notes these additions enhance portfolio quality, sector diversification, and strengthen the quality and diversification of tenants.

Overall, the REIT's property portfolio increased by approximately $1.42 billion to $6.98 billion for the half, boosted by its new acquisitions and "$532 million in property revaluation uplift".

As a result, the company's weighted average lease expiry (WALE) is now at 12.2 years, thereby providing long-term income security, according to the company.

Charter Hall's property portfolio now stands at around $7 billion, up from $5.6 billion on 30 June 2021.

As well, 46% of its leases are now inflation-linked – resulting in a 3.3% weighted increase in 1H FY22 as CPI soared to multi-year highs last year.

The company also announced distributions of 15.24 cents per share, up 5.1% on the previous payment – and, importantly, well ahead of the inflation figure.

Subsequent to its progress this half, Charter Hall's capitalisation rate has trimmed from 4.77% at 30 June 2021 to now rest at 4.38%.

Management commentary

Speaking on the announcement, Charter Hall Long WALE REIT Fund Manager Avi Anger said:

During 1H FY22 we successfully completed the acquisition of the ALE Property Group in partnership with Hostplus. This has seen us further improve the quality and diversity of CLW's real estate portfolio and the resilience of CLW's income through increasing our exposure to Australia's leading hospitality operator, Endeavour Group. In addition, we further increased our exposure to the Industrial and Logistics sector with three high quality acquisitions, two of which were secured off-market. These acquisitions were a direct result of the depth of expertise and ability of the Charter Hall management platform which the REIT benefits from.

What's next for Charter Hall?

Today Charter Hall's board reaffirmed FY22 operating earnings per share (EPS) guidance of "no less than" 30.5 cents.

This, it says, reflects growth of no less than 4.5% over FY21's operating EPS of 29.2 cents.

Aside from that, there was no other specific guidance provided by the REIT in its earnings release today.

Charter Hall share price snapshot

In the last 12 months, the Charter Hall share price has gained almost 5%. This year to date, it is down almost 3%.

The company has a market capitalisation of around $3.5 billion.

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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