Analysts at sponsor brokers UBS and JPMorgan have started distributing marketing research to fund managers on the slated float of Charter Hall Long WALE REIT, sources told Street Talk.
Investor sources noted JPMorgan analysts were penciling in a distribution yield - which depends on valuation - of 5.2 to 5.4 per cent. UBS analysts are said to have come in slightly higher at 5.3 per cent to 5.6 per cent.
The REIT will comprise an initial portfolio of 66 properties independently valued at $1.25 billion and a weighted-average capitalisation rate of 6.4 per cent, Charter Hall Group said in an ASX statement on Friday. It also noted a weighted-average lease expiry of 12.5 years and occupancy of 100 per cent.
JPMorgan analysts labelled the Long WALE REIT's portfolio as "rock solid" and highlighted structured annual rent reviews. They also told prospective investors the REIT's low gearing provided scope for further acquisitions of properties and outlined $300 million to $500 million available for purchases.
Charter Hall's group chief David Harrison said the new REIT would have a market capitalisation of more than $1 billion and the parent would have a co-investment of up to $250 million.
