Charter Hall seals Telstra portfolio of property asset

Charter Hall has raised $261m for a satellite trust and nabbed a near half stake in a $1.4bn property portfolio from Telstra.

Telstra CEO Andy Penn. Picture: AAP

Property group Charter Hall has defied market volatility with a major raising for its satellite trust that specialises in long-leased property, as it acquired a near half stake in a $1.4 billion property portfolio from Telstra.

The raising benefited from improving market sentiment as international markets gained ground and investors welcomed the defensive nature of the structured property deal.

The $261 million raising for the Charter Hall Long WALE REIT was conducted by investment banks JPMorgan and UBS, with the latter bank also advising Telstra on the disposal.

Telstra had indicated that it would look to sell off non-core ­assets as part of its turnaround strategy under chief executive Andy Penn.

The deal nets Telstra about $700m and sees the telco hit the halfway mark on its goal of raising $2 billion through asset sales.

“When we announced our T22 strategy in June 2018, it included the goal of monetising up to $2bn of assets to strengthen our balance sheet,” Mr Penn said.

“Since then we have been working to unlock the true value of some of our assets and today’s agreement, when completed, will take us to around the $1bn mark.”

Telstra has also reached an agreement to sell part of its portfolio of data centres in Europe and Asia to global private equity firm I-Squared Capital for $160m.

In addition to the two latest agreements, Telstra has also sold a portion of its ventures arm, Telstra Ventures, to US private equity heavyweight HarbourVest for $75m in July last year.

The property deal cashes in on the appetite of defensive investors and could spark more raisings in the A-REIT sector.

Charter Hall chief executive David Harrison said creating the new partnership continued the group’s successful growth of new vehicles, while further extending its long lease investment strategy.

“It also continues the strong relationship we have with Telstra, one of our significant tenant-customers, and demonstrates Charter Hall’s leading position in the sale and leaseback market in Australia,” he said.

DataRoom on Thursday revealed investment bank JPMorgan was working as an adviser to Charter Hall on the acquisition of the 49 per cent stake in the Telstra portfolio alongside its Charter Hall Long Wale REIT.

Charter Hall has set up a new managed partnership to buy the interest in the portfolio that is leased to Telstra for an average term of 21 years. Charter Hall Long WALE REIT took a half stake, a wholesale partner holds 28.2 per cent, and the group itself holds 21.8 per cent.