Charter Hall Long WALE REIT said it will conduct a A$94.1 million fully underwritten accelerated non-renounceable entitlement offering to finance its planned A$90.8 million acquisition of Virgin Australia's headquarters in Brisbane, Australia.
The grade A asset at 56 Edmonstone Road in the inner suburb of Bowen Hills has 12,427 square meters of net lettable area across three low-rise office buildings. It is fully leased to Virgin Australia on an 8.4-year weighted average lease expiry. According to a news release, the agreed price consideration for the acquisition translates to a 6.9% initial passing yield and a 6.8% capitalization rate.
In order to cover the cost of the acquisition, the REIT will offer to exchange one new security for every 9.25 existing securities held by eligible security holders at a fixed price of A$4.15 per security.
The company said all of the directors of its responsible entity, Charter Hall WALE Ltd., as well as its largest security holder, Charter Hall Group, have committed to take up their full entitlements under the offer, which will be underwritten by UBS AG's Australian branch.
Meanwhile, the REIT also announced that recent revaluation of 46 assets in its 80-property portfolio has found that the assets' value grew by A$19.6 million, or 1.4%, as of December compared with the properties' recorded value in June.
