Good afternoon, ladies and gentlemen. Apologies for the minor delay. ASX computers, but that's what happens in the world we live in today. Glitches everywhere. Good afternoon. On behalf of the Board of Directors, it is my pleasure to welcome you to the 2026 annual general meeting of the Charter Hall Long WALE REIT, better known to us as CLW. My name is Glenn Fraser, and I'm the Independent Chair of CLW Board of Directors. As the necessary quorum is present, I declare this meeting properly constituted and open. I'd like to commence today's meeting with an acknowledgement of country. Charter Hall acknowledges the traditional custodians of the lands on which we work and gather. We pay our respects to elders past and present, and recognize their continued care and contribution to country. This afternoon, I'm going to provide a brief overview of CLW from the board's perspective.
Avi Anger, the Diversified CEO and CLW Fund Manager, will then provide an update on the REIT's strategy, FY 2026 operational and financial performance, recent investment activity, and the outlook for FY 2027. Following Avi's address, we'll take questions before moving to the formal item of business, being the re-election of Belinda Robson as an Independent Director. I would like to introduce my fellow directors, Ceinwen Kirk-Lennox, Independent Non-Executive Director. Ray Fazzolari, Independent Non-Executive Director. Michael Gorman, Independent Non-Executive Director. David Harrison, Executive Director and Managing Director and Group CEO of the Charter Hall Group. Carmel Hourigan, Executive Director. Our new Director, Belinda Robson, sends her apologies. Belinda is Independent Non-Executive Director, and unfortunately is on the other side of the world performing board duties for another significant vehicle and was unable to attend.
She had a preexisting business arrangement before she took on the board role, but having someone of Belinda's capability on the board is no doubt going to be very helpful to CLW going forward. Also present today are from the management team, Avi Anger, Diversified CEO and CLW Fund Manager. Darryl Chua, CLW Deputy Fund Manager, and Erin Kent, Head of Diversified Finance. CLW is Australia's largest diversified net lease REIT, providing investors with an exposure to a high-quality portfolio of long lease properties occupied by leading corporate and government tenants.
At 30 June 2026, CLW's portfolio was valued at around AUD 6.1 billion and comprised 505 properties. Occupancy remained at 99.9%. 99% of the portfolio is leased to blue-chip tenants, and the portfolio WALE was 9.2 years. The portfolio generated average annual net property income growth of 3.1%, while 51% of the portfolio income was derived from triple net leases.
These characteristics support resilient and predictable cash flows with a significant proportion of property expenses borne by tenants. During FY 2026, the portfolio benefited from active curation, earnings accretive investments and positive valuation movements while maintaining high occupancy and a long lease profile. Sustainability remains integrated across the Charter Hall platform and is an important contributor to long-term value for investors, customers, and communities. During FY 2026, CLW maintained its net zero Scope 1 and Scope 2 emissions for assets under its operational control, supported by Charter Hall Group's renewable energy procurement and nature-based offset strategies. Installed solar capacity was 8.7 MW, with 96% supplying tenants directly and 11 MWh of battery capacity installed across the CLW industrial portfolio. The office portfolio maintained a 5.4 star NABERS energy rating and a 4.7 star NABERS water rating.
CLW also scored 82 points in the 2025 GRESB assessment, a four-point improvement, and maintained an A ranking for GRESB's public disclosure. Beyond environmental performance, Charter Hall Group employees contributed more than 3,700 hours. The group invested AUD 350,000 in natural disaster relief and recovery initiatives, and continued to advance reconciliation commitments and responsible supply chain practices. Your board remains focused on strong governance, transparent disclosure, and ensuring that CLW is managed in the best interest of its security holders, and we thank you for your continued support. Today is my last day as Chair of CLW, as I retire at the end of today's meeting after 10 years' service on the board. Michael Gorman is our incoming Chair, and CLW is lucky to have such an experienced and competent property professional as Chair.
I would like to take this opportunity to thank my fellow Directors, the management of CLW, and our security holders for all their support over the last 10 years. I am confident that CLW, its board, and its management are well-placed to drive CLW forward. I will now hand over to Avi Anger, Diversified CEO and CLW Fund Manager.
Thank you, Glenn. I will begin with CLW's net lease strategy and then review the FY 2026 results, capital management initiatives, portfolio activity, and our outlook for FY 2027. CLW's objective is to provide investors with stable and secure income while targeting both income and capital growth through a diversified portfolio of long WALE properties leased to corporate and government tenants. Our strategy combines three core disciplines: strategic portfolio curation, active asset management, and prudent capital management. The underlying net lease characteristics are equally important. Long-term leases, annual contracted rent increases, blue-chip tenants, mission-critical properties, diversification by tenant, industry location, and property type, and capital-efficient lease structures under which tenants pay the majority of property expenses. Turning to slide nine. CLW delivered operating earnings per security and distributions per security of AUD 0.255, in line with guidance and representing 2% growth on the prior FY 2025 year.
Net tangible assets increased by 2.6% to AUD 4.71 per security, and the portfolio delivered average annual net property income growth of 3.1%. Active portfolio curation resulted in AUD 248 million of earnings-accretive net acquisitions, whilst the portfolio recorded a AUD 188 million net valuation uplift, equivalent to a 3.2% increase during FY 2026. The portfolio WALE remained long at 9.2 years. Balance sheet gearing was 27.5% on a pro forma basis, at the lower end of our 25%-35% target range. We also completed the transition to a new AUD 2 billion secured debt platform and reduced the average credit margin across balance sheet debt by 20 basis points to 1.2%. For FY 2027, CLW is guiding to operating earnings per security of AUD 0.255 and distribution per security of AUD 0.255, based on information currently available and barring any unforeseen events. Turning to slide 10.
As I mentioned, during the year, we completed a comprehensive refinancing of CLW's balance sheet debt, establishing a new AUD 2 billion secured platform. The refinancing extended the average debt maturity by 1.6 years to 4.3 years, with staggered maturities from FY 2029 to FY 2032 and 10 separate lending counterparties. The average credit margin reduced by 20 basis points to 1.2%, delivering immediate interest cost savings and earnings accretion. The new platform also provides an improved covenant package, including a 65% balance sheet loan-to-value covenant, a 1.5x interest cover covenant, and no look-through covenants. [audio distortion] Turning to slide 12.
Charter Hall's diversified platform and sale and leaseback expertise have enabled CLW to invest approximately AUD 1 billion of equity in long WALE triple net lease assets. Across the investments shown on this slide, CLW has generated more than AUD 1.2 billion of equity value and income, representing a 123% total return on invested equity [shares]. This track record reflects both the quality of assets and leases acquired and the benefits of disciplined portfolio management over the investment period. Slide 13.
Based on CLW's FY 2027 distribution guidance of AUD 0.255 and the closing security price yesterday of AUD 3.22, CLW offers a prospective distribution yield of 7.9%. As shown on this slide, the yield was above the comparison yields for Australian term deposits, the Australian 10-year government bond, four largest Australian banks, the weighted average AREIT yield, and the ASX 200 dividend yield as at the date specified in this presentation.
Turning to slide 14. We continue to increase CLW's exposure to long WALE critical social infrastructure properties in strategic locations. In April 2026, CLW settled an increased interest in the Telstra Exchanges portfolio for AUD 63 million. The portfolio comprises 36 properties leased to Telstra that are critical to Australia's national fiber telecommunications network. The leases are triple net and include annual CPI plus 0.5% rent escalations, and the portfolio has a 14.5 year weighted average lease term at settlement. Post-balance date in July 2026, CLW settled the acquisition of a 25% interest in the Sonic Healthcare integrated pathology laboratory in Brisbane for AUD 53.4 million. The property is subject to a 20-year triple net lease with a further 30 years of options and annual CPI-linked rent reviews capped at 3.5%. Turning to slide 15. Active asset management also increased portfolio WALE during the year.
At our Coles Distribution Centre in Perth, practical completion was achieved for the new cold store expansion during the second half of FY 2026. On completion, the remaining lease term reset to 12 years across both the expanded and the existing facility. In November 2025, CLW acquired a 49.9% interest in the Coles CoreWest Distribution Centre under construction in Truganina in Melbourne's West. The 68,100 sq m automated facility is fully pre-leased to Coles for an initial term of 20 years and is forecast to complete in the second half of FY 2027 with construction progressing well ahead of program. At our Bunnings Mackay South property, Bunnings exercised its option for a further six-year term, which increased the remaining lease term on this property to 6.4 years. Slide 16. As at 30 June 2026, CLW held 505 properties with a total portfolio value of approximately AUD 6.1 billion.
The weighted average cap rate remained stable at 5.4%, occupancy remained at 99.9%, and the portfolio WALE was 9.2 years. Exposure to triple net leases was 51%, while 54% of rent reviews were CPI-linked with a weighted average rent review of 3.1%. The portfolio remains diversified across convenience net lease retail, industrial and logistics, data centers and social infrastructure, and office assets, as well as well diversified across geography and tenant industries. On slide 17, we have some more details about the tenant industries that we have exposure to. CLW's tenant base is weighted towards defensive and resilient industries. Government tenants represent 21% of the income of the portfolio, hospitality, convenience retail at 20%, grocery and distribution 13%, data center, telecommunications 13%, energy and convenience retail 11%, and then we also have exposure to banking, professional services, food manufacturing, and other industries.
This diversification, combined with mission-critical assets and high-quality tenant covenants, support income resilience through economic cycles. Turning to slide 18, CLW enters FY 2027 with a AUD 6.1 billion diversified portfolio, long 9.2 year WALE, and occupancy near 100% with contracted rental increases across all leases. Active curation and asset recycling remains central to enhancing portfolio and tenant quality and recent transaction activities included in our FY 2027 guidance. Based on information currently available and barring any unforeseen events, CLW's FY 2027 guidance is operating earnings per security of AUD 0.255 and distributions per security of AUD 0.255. As I noted earlier, based on yesterday's closing price of CLW securities, that represents an attractive distribution yield of 7.9%.
I'd like to thank the board and the broader Charter Hall team for their support, and our security holders for their continued trust. We remain focused on delivering stable and secure income, and targeting both income and capital growth through CLW's diversified long WALE net lease strategy. In closing, I'd like to thank Glenn for his significant contribution to CLW over the past decade, and for his leadership as chair since the REIT's IPO. As Glenn retires from the board at the conclusion of today's meeting, I'm pleased to welcome Michael Gorman as his successor as Chair. Michael brings more than three decades of experience in real estate and the public equity and debt markets, having held senior roles at Novion Property Group and its predecessor organizations, including Deputy Chief Executive, Chief Investment Officer, and Fund Manager. I will now hand back to Glenn to open the meeting for questions.
Thank you, Avi. I'll now open the meeting to questions. If you could please introduce yourself, and if you're representing a company, advise where you're from. If you have more than one question, please ask them together so that we can respond efficiently.
I'd like to ask. My name's [Lindsay Somerville]. I'd like to ask why we don't have a webcast live for other shareholders to take notice of what's happening at the meeting, and how long have EY been our auditors?
There is a webcast.
But it's not live, I don't think. It's not live for people to come in now and—
It's live. Yeah.
Can they ask questions live, though?
No. There is an opportunity for questions to be submitted prior to the meeting, and they'll then be read out at the meeting and answered at the meeting. All shareholders are invited to submit questions in the notice of meeting.
Okay. But they can't ask them live now?
They can't ask them live, no. We don't have that functionality. But there's ample opportunities to submit questions ahead of the meeting.
Is there any reason why we don't have that functionality?
Well, it costs more money. It creates more effort and technology to set up. I'm not sure how much value it would add, given there is an opportunity to submit questions very easily via email prior to the meeting.
Yeah, I understand.
Your second question, Mr. [Somerville], was Ernst & Young, they've been auditing the FY 2026 financial statements, was the first year of the Ernst & Young audit.
Oh, okay. I have some other questions, but I'll ask for anybody else.
Yeah, keep on.
Yeah.
Yeah.
As long as you've got the microphone, yeah. Yeah. Continue on.
I may not give it back to you.
Do we have proxy advisors, and what results do we get from any proxy advisors?
Well, there is a vote from unitholders. We are not told who advised who. We get the institutional investors' vote on the resolution and we will see the results of that shortly.
Yeah. Final question. Artificial intelligence, what do you see happening? Is that something that we are concerned with in the company at this stage?
I don't think we're concerned with it. I think we're like the rest of the world. We're dealing with it as best we can. To date, I think from what the management tell me, it's been quite a positive experience inside the Charter Hall Group. Very importantly, they're managing it in a sense of ensuring the data and the IP that Charter Hall has remains within the Charter Hall network.
I'd probably just add from a group point of view, with 600 staff, we're always looking how we can use AI to make our people more productive in terms of the service they provide to both tenant and investor customers. The biggest focus for us is how is AI going to impact our tenants, and what tenants may be disrupted, what tenants may be augmented, what tenants may grow out of the phenomena. AI is a very broad subject. It's not just the software. It's obviously driving demand for data centers, et cetera.
As a group, we are not pursuing built-form data centers. It's not something that we necessarily think we have sufficient expertise in compared to peers that do have that expertise. We have been taking advantage of the boom, if you like, by selling industrial land at big premiums to what we've paid for it to data center operators. I think that's the best answer I can give you in terms of a broad response on AI.
Yeah. Thank you.
Thank you. Are there any further questions from the floor? Avi.
There is one more question.
One more question.
Thank you. [Kevin Samuels]. I was just looking at some of the notes that I took at the meeting last year, and I noted that at the time, you talked about the portfolio being revalued, which seems to have occurred. I think you noted that there was a AUD 188 million portfolio increase. Last year, you said that your gearing was 31% and that the rise in expected assets hopefully would decrease your gearing, which it has. I think you said it's 27.5% now. But you also noted last year that that would allow you some increased buying. Has that occurred? Last year, you said you had 510 properties, and I think this year it's 505. Just some general comments on increasing, not so much the value, but increase in properties and assets that you have.
Yes. Thanks for the question. I might answer that.
Yeah.
If that's okay.
Yeah.
As noted in the presentation, we have acquired about AUD 250 million of net acquisitions. We have acquired about AUD 570 million and sold about AUD 250 million of assets over the last 12 months. We have sold some smaller assets. The dollar value of those are quite small, but the number is higher, and then bought some larger assets. We are able to sell down some assets that we have held for some time, added value to, and sold them at very attractive prices, and then reinvested that into higher-yielding, better quality, longer lease opportunities. The number of assets declined because we have invested in some larger assets and sold a number of smaller assets. Yes, we have used some capacity, acquired additional assets, and yes, the number is reduced as well.
Thank you.
Thank you, [Kevin]. If there are no other questions from the floor, we had an online ability for people to submit questions. Are there any questions there that have been submitted?
No. There are no questions.
Okay. Thank you, then, Avi. We will now move on to the formal item of business, which is set out in the notice to the meeting. The item is Resolution 1: the election of Belinda Robson as an Independent Director of Charter Hall WALE Limited. I think there is a technical I should have been given a document which will explain the voting procedure. Has anybody seen that? Because I have just realized it has not been given to me.
I think we have t he yellow form.
Supplement the—
Yeah. I think the important issue is that people who can vote have a yellow card. Is that correct? Yeah. Okay. The first resolution is to consider, and if thought fit, pass the following resolution of security holders. That Ms. Belinda Robson be elected as a Director of Charter Hall WALE Limited. Belinda, unfortunately, is not with us today. There was to be a recording of her address. Yeah. We can deal with that.
Thank you, and good afternoon to my fellow Directors, to the Charter Hall team, and most importantly to our security holders. Apologies I am not there in person today, but I had a prior long-standing work commitment overseas. I am unable to be with you at the AGM. It is a privilege to have been appointed to the CLW board, and I would like to thank the board for the confidence they have shown in me. Let me tell you a little bit about my background. I have spent more than 35 years in Australian property. I started my career in 1990 as a graduate with Lendlease, and over the following two decades, I worked across shopping center management, marketing, and operations before moving into investment and funds management.
My final executive role was as Fund Manager of the retail portfolio of the Australian Prime Property Fund, which at the time was one of the country's largest and best-performing wholesale property funds. Since 2012, I have worked as a Non-Executive Director. I was on the board of Region Group from just before its listing until late last year, where I chaired the Investment Committee and served on the Audit and Risk, Remuneration, and Nomination Committees. For 11 years, I also sat on the GPT Funds Management board, representing the interests of third-party investors in GPT's wholesale funds. Today, I am a Non-Executive Director of the Goodman Group, where I am also a member of the Audit, Risk, and Compliance Committee.
I have recently joined the Independent Investment Committee of the Scape Core Fund, which is part of The Living Company, a private Australian developer and operator across student accommodation, retirement living, and residential real estate. So why do I hope this experience is useful to CLW? This REIT is built on long leases to high-quality tenants across a diversified portfolio. Much of my career has been spent on exactly those questions. The quality and durability of income, disciplined investment decisions, and sound governance through different market cycles. Having sat on board, whose role is to represent investors alongside an external manager, I understand how important it is that independent directors keep security holders' interests front of mind. That said, I do not expect to bring all the answers.
Good boards work because directors and management bring different perspectives and challenge one another constructively, and that is the spirit in which I intend to contribute. I look forward to working with my fellow directors and the Charter Hall team, and to meeting many of you in the years ahead. Thank you.
I now invite people in the room to— oh, yeah, sorry. The proxies that have been delivered to date are shown at 98.12% for, 0.47% open, and 1.4% against. To finalize our proceedings, if you wish to vote, there is a ballot box from an MUFG representative behind us, and if you have a yellow form, you are pleased to vote. Thank you for doing that. The outcome of the resolution will be released to the ASX following the end of the meeting. As there is no other business to be conducted, I now declare the meeting closed. I thank you for your attendance today and for your ongoing support of—