Charter Hall Long WALE REIT

FY '26 operating earnings and distributions were both $0.255 per security, each 2% higher than FY '25. Like-for-like net property income growth was 3%, and finance costs increased by 18.4% due to higher average debt and higher floating rates. NTA at 30 June 2026 was $4.71 per security, up 2.6%, and 100% of the portfolio was independently valued, producing a $188 million or 3.2% valuation uplift. Balance sheet gearing was 27.5%, weighted average cost of debt was 4.7% at 30 June 2026, and the secured refinance reduced the average credit margin by 20 bps to 1.2%. FY '27 guidance is operating earnings and distributions of $0.255 per security; management also said the forecast FY '27 distribution yield is 6.7% based on yesterday's closing price.

Avi Anger framed FY '26 as a strong year marked by earnings growth, NTA growth, and a balance sheet reset through the $2 billion secured refinance. He emphasized active portfolio curation, pointing to acquisitions and divestments that lifted WALE and improved portfolio quality, including the Coles and Sonic transactions. His tone was constructive and confident, but he acknowledged that some FY '27 expiries are still being worked through and said updates would come in the coming weeks.

Erin Kent focused on the financial mechanics behind the year: like-for-like NPI growth of 3%, finance costs up 18.4%, and FY '26 weighted average cost of debt at 4.7%. She said the refinance lowered the weighted average credit margin by about 20 bps, debt maturities are staggered from June 2029 to June 2032, and hedging was 84% at a fixed rate of 3.1% at 30 June 2026, with 85% average hedging expected across FY '27 and 49% hedge coverage in FY '28. She also noted $160 million of capital was returned to CLW from JV refinances post balance date.

Analysts focused on FY '27 expiries, especially the 3.7% of the portfolio expiring, and whether guidance included downtime. Management said those expiries are already factored into guidance, but declined to provide a dollar figure and said an update may come in the next few weeks. Questions also centered on the Telstra Canberra asset, where Avi said no income beyond current occupation is assumed for FY '27, and on hedge costs; Erin said the better hedge outcomes came from new swaps, restructuring existing swaps, and some caps for FY '28, with any capital paid described as immaterial and offset by a derivative asset. Analysts also pressed on JV debt and leverage; Avi said CLW has about $1.3 billion of JV debt, average JV leverage is about 40% to 45%, and there is no longer a look-through debt covenant after the secured platform refinance.