CLW – UBS rates the stock as Neutral

Charter Hall Long WALE REIT, in a 50/50 partnership with Hostplus, has entered into a scheme to acquire ALE Property Group ((LEP)) for -$1.68bn, reflecting a premium to net tangible assets of 53%.

UBS estimates -4% dilution (FY basis, previous guidance included a buffer for dilutive deals), 7.5 years to market rent reviews and upside from extending leases and redevelopments/densification of sites. The analyst doesn’t include the transaction in forecasts just yet.

The analyst feels that with gearing elevated, future acquisitions will likely require an equity raise and earnings accretion is thought to be challenging for sought-after quality long WALE assets. The target price of $5.30 and Neutral rating are unchanged.

Sector: Real Estate.


Target price is $5.30.Current Price is $5.04. Difference: $0.26 – (brackets indicate current price is over target). If CLW meets the UBS target it will return approximately 5% (excluding dividends, fees and charges – negative figures indicate an expected loss).



About Broker News

FNArena's Australian Broker Call, is your daily news report on the latest recommendation, valuation, forecast and opinions recently published by Stockbrokers.

View more articles by Broker News →