Back after their $600 million grab of ALH-tenanted pubs in September, the Long WALE Investment Partnership is set to buy another $200 million of the blue-chip freeholds.
Last year the listed Charter Hall Group teamed up with superannuation giant Hostplus to form the LWIP, each chipping in a lazy $150 million for the entity, which quickly acquired 54 pubs tenanted by the 75 per cent Woolworths-owned Australian Leisure & Hospitality.
Recognising the strength of the investment potential, the two companies have created a second round of investment funds, with Charter Hall fronting $10 million (for a 10 per cent interest) and Hosplus contributing $90 million (for a 90 per cent interest)
Speaking to PubTIC, Hostplus says LWIP 2 is a continuation of its plans in hotel real estate, which complements its traditional property investments.
“As a growing fund, the rationale for continuing to support this investment strategy has not changed – the long dated CPI linked triple net lease structure backed by a strong credit covenant (ALH – 75% owned by Woolworths) provides attractive investment attributes that align with our primary objective of delivering stable returns to our members,” said a spokesperson.
Similarly, Charter Hall reported consistent yields around 6.8 per cent, and joint managing director David Harrison was quoted in The Australian as revealing the new vehicle has already snapped up some opportunities.
“We have secured four assets totalling $56 million from three separate private vendors,” said Harrison.
Long WALE parts 1 and 2 join the other major landlord to ALH, the also listed ALE Property Group.