Charter Hall plans to list $1.2 billion REIT on ASX

Charter Hall Group (ASX: CHC) is preparing to list on the ASX a new real estate investment trust (REIT) that aims to invest in office, industrial and retail properties across Australia.

Charter Hall Long WALE REIT will comprise an initial portfolio of 66 properties independently valued at more than $1.2 billion. Long WALE REIT will invest in Australasian properties that are leased to corporate and government tenants on long term leases, said a media release.

It expects to file for the IPO with ASIC on September 27.

Charter Hall's managing director and Group CEO, David Harrison said: “The REIT will have a market capitalisation in excess of $1 billion and Charter Hall will have a co- investment of up to $250 million. At IPO the REIT will target no debt on balance sheet and look through gearing of less than 20%.”

He said Long WALE REIT's objective is to provide investors with stable and secure income. 

The REIT will target the distribution of 100% of operating earnings and expects to provide investors with stable, recurring income through quarterly distributions. Growth in distributions is expected to be underpinned by a combination of fixed rental increases and CPI linked rental reviews, the release said. 

Nearly 58% of the income from the initial portfolio is subject to fixed rental increase, while the balance of income, about 42%, is subject to rental reviews linked to CPI. The weighted average rental review across the initial portfolio is estimated at 2.8%.1 

Charter Hall has established Charter Hall WALE Limited as the responsible entity of the REIT. The fund would be managed by Avi Anger.

Charter Hall has a successful track record in investing, having done deals worth $12.6 billion in the last five years, which include $3.3 billion in divestments.

J.P. Morgan Australia Limited and UBS AG, Australia Branch are the joint lead managers for the IPO with King and Wood Mallesons the legal advisor.