CLW – Macquarie rates the stock as Outperform

Charter Hall Long WALE REIT has acquired a 50% stake in a Charter Hall Group ((CHC))-managed partnership holding 49% of 70 BP petrol station assets in New Zealand. The remaining stake in the fund will be held by Charter Hall Retail REIT ((CQR)).

The $121m acquisition will be $70m funded via an equity raise, with the remainder funded by debt.

While the REIT is disposed to raising equity, the broker explains there is a track record of earnings accretive transactions.

Macquarie notes the transaction is in-line with strategy and makes minimal changes to funds from operations (FFO) forecasts.

The Outperform rating is unchanged. The target price is $5.54

Sector: Real Estate.

Target price is $5.54.Current Price is $5.03. Difference: $0.51 – (brackets indicate current price is over target). If CLW meets the Macquarie target it will return approximately 9% (excluding dividends, fees and charges – negative figures indicate an expected loss).

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