Charter Hall and Hostplus’ Long WALE REIT has extended its relationship with Australia’s biggest publican, buying three hotels in a sale and leaseback deal worth $23.2 million.
Long WALE (Weighted Average Lease Expiry)(ASX: CLW) is managed by Charter Hall Group (ASX: CHC), with its 25+ years’ experience managing property and over $19bn in funds under management.
The listed REIT invests in high-quality real estate assets predominantly holding long-term leases, and is 55 per cent owned by Charter Hall and Hostplus.
Drawing upon existing credit facilities, CLW has acquired 100 per cent interest in three more hotel properties from the portfolio of ALH (Australian Leisure & Hospitality), continuing that group’s tendency toward freeing capital through sale and lease-back deals.
The properties acquired are: two from Queensland, New Farm’s Brunswick Hotel and Maryborough’s Old Sydney Hotel, and the Ship Inn Hotel, in Busselton, Western Australia.
The combined properties represent a blue-chip portfolio yield of 6.26 per cent.
Upon settlement, each will be under a new 15-year triple-net lease, and each include either a BWS or Dan Murphys outlet.
“We are very pleased to be able to continue to grow our relationship with the ALH Group via the acquisition of these three high quality properties,” announced CLW fund manager, Avi Anger.
“This transaction extends CLW’s WALE and highlights our ability to continue to secure high quality properties, leased to quality tenants with strong covenants.”
CLW holds 54 pub assets around Australia, leased to ALH Group for an average (at 31 March, 2017) of 17.5 years. It recently saw 33 properties independently valued, showing a $28.4m (2.8 per cent) uplift since the previous valuation.
The latest acquisitions are in line with its debt retirement and positive forecast in April, and will see the total portfolio reach valuation circa $1.37bn, with weighted average cap rate of 6.2 per cent.