Charter Hall Long WALE REIT (CLW) H1 2025 earnings summary

Executive summary

• Portfolio valued at AUD 5.5 billion, diversified by tenant, industry, geography, and property type, with a WALE of 9.7 years and 99.8% occupancy as of 31 December 2024, leased primarily to blue-chip tenants.

• 53% of income from triple-net lease properties, and 99% of tenants are government, ASX-listed, multinational, or national businesses.

• 1H FY25 operating EPS of 12.5c per security, in line with full-year guidance; 3.5% like-for-like net property income growth.

• Completed AUD 300 million in asset sales and a AUD 50 million security buyback, maintaining balance sheet gearing at 31.8%.

• Moody's Baa1 credit rating reaffirmed with a stable outlook.

Financial highlights

• Like-for-like net property income grew 3.5% year-over-year, benefiting from 54% of income being CPI-linked.

• Operating earnings and distributions per security for the half-year were AUD 0.125, in line with full-year guidance of AUD 0.25 per security, but down 3.8% compared to 1H FY24.

• Net tangible assets (NTA) per security at AUD 4.62, stable since June 2024, with a slight decrease from $4.66.

• Statutory profit of $51.3 million for the half year ended 31 December 2024, compared to a $258.4 million loss in the prior period.

• Operating expenses reduced by 17.5% and finance costs by 15.6% due to divestments.

Outlook and guidance

• FY25 operating earnings and distribution guidance reaffirmed at AUD 0.25 per security, representing a 6.4% yield based on recent closing price.

• The REIT benefits from inflation-linked revenue streams and interest rate hedging.

• No further buyback planned; focus on earnings growth through acquisitions, recycling, and benefiting from potential interest rate reductions.

• Uncertainty from geopolitical events, inflation, and interest rates may impact future performance, but no material changes to operations are anticipated.