CLW - Notification to Ineligible Securityholders

On 16 August 2019, Charter Hall WALE Limited, as responsible entity for Charter Hall Long WALE REIT (CLW or the REIT), announced a fully underwritten 1 for 13 accelerated non-renounceable entitlement offer (Entitlement Offer) of new stapled securities (New Securities) (to raise approximately A$131 million) and a fully underwritten institutional placement (to raise approximately A$130 million) (Placement, and together with the Entitlement Offer, the Offer) at an offer price of A$5.20 per New Security.

The Offer will raise approximately A$261 million and the proceeds will be used to partially fund the acquisition of a 24.5% interest in a portfolio of 37 Telco Exchange Properties (Telstra Portfolio) and a 100% interest in an A-grade office building in Upper Mount Gravatt, Brisbane for a total consideration of A$413.6 million (Acquisitions) and associated transaction costs.

Key highlights of the Acquisitions include:

• The Telstra Portfolio

- Comprises 37 telco exchange properties leased to Telstra Corporation Ltd (Telstra), an S&P/ASX 20 company and Australia’s largest telecommunications company;

- Triple net leases with a portfolio WALE of 21 years and structured annual rental reviews of CPI + 0.5%;

- Introduces a new subsector for the REIT, Telco Exchange Property, with the portfolio value supported by high underlying land value;

-  A Charter Hall managed partnership will acquire a 49% interest and Telstra will retain a 51% interest in a property trust holds the Telco Exchange Properties. The Charter Hall managed partnership will be owned 50% by CLW, 28.2% by a wholesale capital partner and 21.8% by Charter Hall Group;

• ATO Office Building, Upper Mount Gravatt

- Predominantly leased to the Australian Taxation Office;

- WALE of 7.1 years with fixed 2.5% annual rental reviews;

• Acquisitions increase the REIT’s existing exposure to high-quality tenants in Telstra Corporation Ltd and the Commonwealth Government; and
  
• Combined Acquisitions WALE of 17.4 years increases the REIT’s portfolio WALE from 12.5 years to 13.2 years.

The Entitlement Offer comprises an institutional entitlement offer (Institutional Entitlement Offer) and an offer to Eligible Retail Securityholders (as defined below) to participate on the same terms (Retail Entitlement Offer). The Entitlement Offer is being made by CLW in accordance with section 1012DAA of the Corporations Act 2001 (Cth) (Act) as modified by the Australian Securities and Investments Commission Corporations Instrument (Non-Traditional Rights Issue) Instrument 2016/84, meaning that no product disclosure statement or other disclosure document needs to be prepared. The Institutional Entitlement Offer and the Placement have already closed and the results have been announced to the Australian Securities Exchange (ASX).

The Offer is fully underwritten by J.P. Morgan Securities Australia Limited and UBS AG, Australia Branch (Underwriters).

This notice is to inform you about the Retail Entitlement Offer and to explain why you will not be able to subscribe for New Securities under the Retail Entitlement Offer. This letter is not an offer to issue New Securities to you, nor an invitation for you to apply for New Securities. You are not required to do anything in response to this letter.

Details of the Retail Entitlement Offer

The Retail Entitlement Offer is being made to Eligible Retail Securityholders (as defined below), on the basis of 1 New Security for every 13 existing securities held at 7:00pm (Sydney time) on Tuesday, 20 August 2019 (Record Date). Documents relating to the Retail Entitlement Offer were lodged with the ASX on Thursday, 22 August 2019 and are being mailed to Eligible Retail Securityholders.

Eligibility criteria

CLW has determined, pursuant to Listing Rule 7.7.1(a) of the ASX Listing Rules and section 9A(3)(a) of the Act, that it would be unreasonable to make offers to securityholders in countries other than Australia and New Zealand in connection with the Retail Entitlement Offer having regard to:

(a) the relatively small number of securityholders in the other jurisdictions where the Retail Entitlement Offer would be made;

(b) the number and value of securities for which such securityholders would otherwise have been entitled; and

(c) the costs of complying with the legal and regulatory requirements in each other jurisdiction where the Retail Entitlement Offer would be made.

Securityholders who are eligible to participate in the Retail Entitlement Offer (Eligible Retail Securityholders) are securityholders who:

(a) are registered as a holder of Securities as at 7.00pm (Sydney time) on the Record Date;

(b) have a registered address in Australia or New Zealand as listed on CLW’s security register on the Record Date;

(c) are not in the United States and are not acting for the account or benefit of a person in the United States (to the extent such a person holds securities in CLW for the account or benefit of such persons in the United States);

(d) were not institutional securityholders eligible to participate under the Institutional Entitlement Offer (and were not treated as ineligible institutional securityholders under the Institutional Entitlement Offer); and

(e) are eligible under all applicable securities laws to receive an offer under the Retail Entitlement Offer without any requirement for a prospectus or other formal offer document to be lodged or registered.

CLW may (at its absolute discretion) extend the Retail Entitlement Offer to certain institutional securityholders in foreign jurisdictions who did not participate in the institutional component of the Entitlement Offer (subject to compliance with applicable laws).

Unfortunately, CLW has determined that you do not satisfy the eligibility criteria for an Eligible Retail Securityholder stated above. Accordingly, CLW wishes to advise you that it will not be extending the Retail Entitlement Offer to you and you will not be able to subscribe for New Securities under the Retail Entitlement Offer. You will also not be sent the retail offer document relating to the Retail Entitlement Offer.

As the Retail Entitlement Offer is non-renounceable, you will not receive any payment or value for entitlements in respect of any New Securities that would have been offered to you if you were eligible. New Securities equivalent to the number of New Securities you would have been entitled to if you were an Eligible Retail Securityholder will be allocated to the Underwriters or to persons from whom the Underwriter has procured subscriptions for New Securities, pursuant to the underwriting arrangements between CLW and the Underwriters.

Further information

If you have any questions in relation to any of the above matters, please contact the Charter Hall Long WALE REIT Offer Information Line on +61 1300 303 063 from 8.30am to 5.30pm (AEST), Monday to Friday. For other questions, you should contact your stockbroker, accountant, taxation advisor, financial adviser or other professional adviser.

On behalf of the Board and management of Charter Hall WALE Limited, thank you for your continued support of CLW.

Yours faithfully,

If you have any questions in relation to any of the above matters, please contact the Charter Hall Long WALE REIT Offer Information Line on +61 1300 303 063 from 8.30am to 5.30pm (AEST), Monday to Friday. For other questions, you should contact your stockbroker, accountant, taxation advisor, financial adviser or other professional adviser. On behalf of the Board and management of Charter Hall WALE Limited, thank you for your continued support of CLW. Yours faithfully,

Mark Bryant

General Counsel and Company Secretary, Charter Hall WALE Limited as responsible entity of the Charter Hall Long WALE REIT

Click here to view the ASX Release
Click here to view the Retail Entitlement Offer