Charter Hall's new listed company, Charter Hall Long WALE REIT, is off to a rough start.
Macquarie analysts - who were not involved in marketing the $600 million-off initial public offering - have told clients the REIT's securities are worth $3.66 to $3.82 each.
That's less than the $4 a security IPO price and saw the broker initiate coverage with an"underperform" rating on the listed property sector's newest stock.
"The REIT's portfolio is backed by long-term sustainable cash flows which is attractive for investors seeking a secure income return with underlying growth supported by fixed or CPI-linked rental reviews," the analysts told clients on Wednesday morning.
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Morgan Stanley considers impacts of SCA Property Group's interest in Charter Hall Retail REIT.
"Offsetting this are i) a distribution which is above our free cash flow forecasts; ii) a portfolio that is >50% weighted (by value) to WA and SA; and iii) a relatively demanding valuation given current peers are trading at similar pricing.
"We have set our $3.82ps price target using the upper end of our NAV. We initiate coverage on CLW with an Underperform rating." Charter Hall Long WALE REIT started trading on Tuesday, after re-structuring its IPO.
The $827 million trust opened at $4.01, rose to $4.02 and fell back to finish the days trading at $3.96.
Charter Hall Group has a 16.24 per cent stake in the new trust.
