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Charter Hall Long WALE REIT Stapled Secs Cons of 1 DIF + 1 FSPT + 1 Finance - Stock Quote CLW

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Morningstar's Charter Hall Long WALE REIT Stapled Secs Cons of 1 DIF + 1 FSPT + 1 Finance Stock Analysis

Valuation
Currency in AUD
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Initiating Coverage of Charter Hall Long WALE REIT; FVE of AUD 5.10, Securities Marginally Overvalued.

Alexander Prineas Equity Analyst

Analyst Note

| Alexander Prineas |

We initiate on Charter Hall Long WALE REIT, or CLW, with a fair value estimate of AUD 5.10. Its diversified portfolio spans office, retail, industrial, social, and agricultural property. Income for the next decade looks secure, thanks to long leases (average 12.2 years as at Dec. 31, 2021) and strong tenants. Key valuation inputs are the discount rate, rental uplifts on existing leases, renewal terms when existing leases expire, and likely future purchases by this acquisitive REIT. These factors produce a medium uncertainty rating.

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Charter Hall Long WALE REIT Stapled Secs Cons of 1 DIF + 1 FSPT + 1 Finance's Company Profile

Business Description

Charter Hall Long WALE REIT is a diversified property trust, with assets in Australia and New Zealand. Occupancy is 99.9%, and weighted average lease length is a long 12.2 years (as at Dec. 31, 2021). More than half the REIT’s leases are triple-net, where tenants pay rates, maintenance and most outgoings. The REIT’s circa AUD 7 billion portfolio of 550 properties spans offices, industrial, retail, social infrastructure, and agricultural logistics assets, with more than three quarters of the portfolio on Australia’s eastern seaboard. Leases are evenly spread between CPI-linked (3.3% average rent increase in 2021) and fixed uplifts (average 3.1% uplift in 2021). The tenant profile is strong, with 99% of occupiers being government, multi-national or national businesses.

Contact
No. 1 Martin Place, Level 20
Sydney, NSW, 2000, Australia
T +61 286519000
Sector Real Estate
Industry REIT - Diversified
Most Recent Earnings
Fiscal Year End Jun 30, 2022
Stock Type
Employees