You make some good points on this thread. I was a little...

You make some good points on this thread. I was a little horrified at first when I saw the announcements a few mornings ago. Having read through the presentation twice and then the annual report, I'm not so concerned now.

Yes, we're taking over a listed stock, but our exposure is only $800 million of the $1.6 billion. Only a portion of that is being paid in cash (although investors in LEP have the right to elect to take all cash). Dilution has been put at 3-4% by Citi and UBS.

The two industrial assets purchased and announced on the same day as this takeover sound excellent. I have no issues with these. They're exactly what I'd expect Charter Hall to be buying for this REIT.

I was astounded to read the leases started in 2018 (three years ago) with renewal in 2028 but are already 37% undervalued. What the hell?! What on earth was ALE REIT doing? Surely a professional property manager wouldn't be that far wrong in contracting with its tenant; that incompetent. And assuming the rent will be, what, perhaps 75 plus percent undervalued by late 2028, how will Endeavour Group feel about such a price rise? I wonder if investors need to hold until 2026 or 27 for these rises to start getting priced into the CLW share price?

The purchase takes us from $5.7 billion in property to $6.5 with our half of the $1.6 billion. It's not that big of a deal. I'm a little surprised another REIT or superannuation fund hasn't taken over ALE before now. It's a good fit for us as well. I agree with you that with the low site coverage (25%) there's opportunity for development.

What really concerns me is the debt levels. At the moment it's tolerable, but I wouldn't want to see any further debt-funded acquisitions for another couple of years. I know financing is cheap but the gearing of 35% and look-through gearing of 42.5% is getting a bit high for my liking.

I suspect CLW aren't actively looking to repay the debt. Rather, by growing the portfolio value through NTA increases, the debt, in percentage terms will fall. NTA grew 16.8% over the past 12 months. It's a pretty fair bet that it will grow from $5.22 per share to $5.70 to $6.00 by June next year. We're also helped with the dividend reinvestment plan which keeps money in CLW and reduces balance sheet gearing. Aventus REIT has benefited from this over the past twelve months. The reinvestment plan has been acting to reduce gearing as AVN issues shares in liu of a distribution.

So, overall it makes sense for CLW to increase exposure to in-demand assets at a time when property prices are growing strongly. And it's only really paying the same price as ALE was at in February 2020 before the market crash.

I bought prior to the last dividend three or four months ago for $4.75. I felt pretty smug when the price rose to $5.30 a week ago. Not feeling so smug this week! Although l bought another 20% stake today at $5.10. That six percent yield, growing distributions and EPS, and a discount to current NTA is very appealing. I hold, and like GPT's discount to NTA and yield. But CLW is more active in growing its portfolio, and is paying a superior dividend. Be sure to reinvest it for the extra 1.5% discount. Such broad property market exposure with rising property prices and low cost of financing is prudent.

In my opinion, it's all a matter of whether one trusts Charter Hall to act responsibly and prudently. Yes, CHC collects fees that the fund manager benefits from, but I see in Charter Hall a conservative company which puts shareholders' interests first. I posted recently about a previously high-flying internet-only retailer about which I'd say the opposite is true! I'd tend to give Charter Hall the benefit of the doubt in this transaction. I've changed my tune a little since my last post here.

My last point is to reiterate what I've said before....I think the main issue with CLW is the label "long WALE" and all the talk about it being focused on long term contracts with government and large corporate entities. If it's a general property trust (in lower case, not the GPT Group) focusing on growth, call it that. We're into petrol stations, pubs, recycling facilities, a David Jones building, Coles distribution centres, Telstra exchanges.... It's pretty diverse. The Charter Hall Diversified Property Trust. I like it!

For an ASX-listed long WALE REIT with 15.2 years WALE, only 3.4% of income assets expiring in the next five years, just 24.5% gearing, oh and 100% occupancy, Charter Hall certainly offers an excellent product. However, I wouldn't be talking about CLW, I'd be describing CQE -- the real, conservative, Charter Hall long WALE REIT.

The advantage of CLW is it's trading below NTA (CQE is a considerable amount above) and the yield is notably higher. I own both.

Best of luck to all CLW holders.