CHLWF (CHLWF) Q4 2026 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by, and welcome to the Charter Hall Long WALE REIT 2026 Full Year Results Briefing. [Operator Instructions] Please note that this conference is being recorded today, Thursday, the 13th August 2026. I would now like to hand the conference over to your host today, Mr. Avi Anger, Diversified's CEO. Thank you, sir. Please go ahead.

Good morning, everyone, and welcome to the Charter Hall Long WALE REIT Results Presentation for the 2026 financial year. Presenting with me today is Erin Kent, Head of Diversified Finance. I would like to commence today's presentation with an acknowledgment of country. Charter Hall acknowledges the traditional owners 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. The format for today's presentation is that I will start with an overview of CLW and key highlights for the financial year. You will then hear from Erin, who will provide an overview of the financial performance of the REIT. I will then return to provide an operational update and portfolio overview and provide guidance for FY '27. We will then offer the opportunity for questions. Turning now to Slide 4 and key highlights for the year. FY '26 was another strong year for CLW. We delivered earnings growth, increased NTA, completed a transformational $2 billion refinancing of our balance sheet debt and continued to actively curate the portfolio while maintaining one of the longest WALE in the Australian REIT sector. I'm pleased to report that we delivered operating earnings and distributions per security of $0.255, representing 2% growth on the prior financial year. Our NTA at 30 June 2026 is $4.71 per security, an increase of 2.6% from 30 June 2025. The portfolio delivered 3.1% average annual net property income growth with 54% of income of the REIT being CPI-linked and the balance being fixed reviews. $284 million of earnings accretive net acquisitions were completed during the year, demonstrating management's focus on active curation to enhance portfolio quality and drive earnings growth. 100% of the portfolio was independently valued over the past 12 months with $188 million net valuation uplift achieved, representing a 3.2% increase in property valuations during FY '26. CLW has a long WALE of 9.2 years, providing security and continuity of income to our investors. We completed a comprehensive refinance of balance sheet debt, establishing a new $2 billion secured debt platform. This resulted in a debt margin of 1.2%, a reduction of 20 basis points. We remain focused on prudent capital management. Balance sheet gearing is 27.5% at the lower end of our target range of 25% to 35%. Looking ahead to FY '27, we are providing guidance of operating earnings and distributions of $0.255 per security. Turning to Slide 5. In June 2026, CLW completed refinancing of its balance sheet debt with a new $2 billion secured debt platform. This refinancing materially strengthens the balance sheet by reducing funding costs, extending debt duration and simplifying the covenant package. The refinance has extended the average debt maturity of CLW's balance sheet debt by 1.6 years to 4.3 years with a staggered maturity profile. The cost of debt has reduced with average credit margins of balance sheet facilities reducing by 20 basis points to 1.2%, providing immediate cost savings and earnings accretion. The secured debt platform also features an improved covenant package with a balance sheet LVR covenant of 65% and ICR covenant of 1.5x. Importantly, there are no longer any look-through covenants relating to balance sheet debt facilities. Turning to Slide 6. On the following slides, I would like to provide an overview of the net lease real estate sector and the features that demonstrate CLW's relative attractiveness as a high-quality long WALE net lease REIT. CLW is diversified long WALE net lease REIT with a strategy of providing investors with stable and secure income and targeting both income and capital growth through an exposure to a diversified portfolio of long WALE properties leased to corporate and government tenants. CLW's attractiveness comes from a simple combination, secured long-term cash flows, embedded income growth, blue-chip tenants, capital-efficient leases, portfolio diversification and access to Charter Hall's market-leading origination platform. Turning to Slide 7. Today, CLW has a $6.1 billion real estate portfolio that is the largest and most diversified net lease portfolio in the AREIT sector. The portfolio is diversified across 505 properties in the convenience, net lease retail, industrial, office and data center and social infrastructure sectors. Our portfolio has an occupancy level of 99.9% and continues to be diversified by tenant, industry, geography and property type, which contributes to the stability of our cash flow. The security of income of the REIT is also reinforced by the high-quality income stream generated from blue-chip tenants with 99% of the tenants of the REIT consisting of government, ASX-listed, multinational or national businesses. Our largest tenants are federal and state governments, Endeavour Group, Telstra and BP. Our portfolio has delivered strong average annual net property income growth of 3.1%. CLW has 51% of its income derived from triple net lease properties. This is an important feature of our portfolio given that under a triple net lease structure, the tenant is responsible for all outgoings, maintenance and capital expenditure. Turning to Slide 8. This slide outlines the key features that make CLW Australia's largest and most diversified net lease REIT. For investors, CLW offers a highly attractive income proposition, underpinned by predictable long-term rental cash flows. The portfolio has a long 9.2-year WALE with the potential to extend to more than 30 years if tenants remain in occupation through their option periods. Rental growth is also embedded across the portfolio with 3.1% average annual rent increases and 54% of lease reviews linked to CPI. Importantly, CLW's income profile is supported by a capital-efficient lease structure with 89% of income derived from net, double net and triple net leases, which reduces landlord expenditure and enhances the resilience of cash flows. The portfolio is also supported by high-quality tenant covenants. Occupancy has remained consistently near 100% since IPO and 99% of leases are to secure government, ASX-listed, multinational or national tenants operating across defensive and essential industries. Finally, CLW is highly diversified across core property sectors with 79% of the portfolio located on the Eastern Seaboard in prime locations. Turning to Slide 9. CLW's net lease strategy has many attractive investment attributes as outlined in the prior slides. Importantly, this has also delivered significant value for CLW investors since IPO. In particular, CLW has greatly benefited from access to Charter Hall's market-leading diversified platform and sale and leaseback transaction expertise and deal flow. Since IPO, CLW has invested approximately $1 billion of equity into long WALE triple net sale and leaseback investment opportunities sourced by Charter Hall. This has resulted in more than $1.2 billion of equity value created and income generated, providing a very attractive total return on invested equity of 123%. Put simply, every dollar of equity invested into long WALE sale and leaseback opportunities has generated more than $2 of value and income for investors. Turning to Slide 10. CLW provides an attractive distribution yield relative to domestic and global investment options. At yesterday's closing price, CLW offers a forecast FY '27 distribution yield of 6.7%, which remains highly attractive relative to many domestic and global investment alternatives. I would now like to hand over to Erin, who will provide an overview of the financial performance of the REIT.

Thank you, Avi, and good morning to everyone on the call. Commencing on Slide 12, which provides a summary of CLW's earnings for FY '26. CLW achieved like-for-like net property income growth of 3%, which has been further enhanced by accretive net investment activity, adding incremental income to the portfolio during the current reporting period. Finance costs have increased by 18.4% due to higher average debt drawn across FY '26 to fund transaction activity, combined with a higher weighted average cost of debt, primarily driven by higher floating rates across the second half of the financial year. Both operating earnings and distributions for FY '26 were $0.255 per security, representing growth of 2% on FY '25 and in line with our guidance provided to the market. Turning to Slide 13 and CLW's balance sheet position. During FY '26, CLW completed $248 million of net acquisitions. This amount includes the on-completion value of the new Coles distribution center in Truganina acquired in the first half. More recent portfolio curation has been executed during the second half of FY '26, which Avi will talk through shortly. 100% of CLW's portfolio was independently valued throughout the financial year, resulting in a total portfolio valuation uplift of $188 million or 3.2%. The REIT's NTA per security was $4.71 at 30 June 2026, representing a 2.6% increase from 30 June 2025, driven by positive revaluations achieved, partly offset by the fair value movement of debt and derivatives. Turning to Slide 14, which provides a summary of CLW's capital management initiatives. In June 2026, CLW completed a comprehensive refinance of its balance sheet debt facilities, establishing a new $2 billion secured debt platform with debt maturities staggered over a 4-year period from June 2029 to June 2032. CLW's off-balance sheet joint venture investments do not have any recourse or cross-default provisions to CLW's balance sheet. At 30 June 2026, CLW's balance sheet gearing was 27.5%, calculated on a pro forma basis, including transactions and refinancing initiatives completed post balance date. CLW's weighted average cost of debt was 4.7% based upon a spot BBSY of 4.5% and hedging of 84% at an average fixed rate of 3.1% as at 30 June 2026. The secured platform refinance lowered CLW's weighted average credit margin across its balance sheet facilities by approximately 20 basis points. During the period, new hedging initiatives were executed, resulting in 85% average hedging across FY '27, providing earnings certainty for the next 12 months and 49% hedge coverage across FY '28. I will now hand back to Avi to provide an operational update and portfolio overview.

Thank you, Erin. Turning now to Slide 16. During the year, we continued our strategy of active portfolio curation and capital recycling to drive long-term sustainable growth. We settled $248 million net transactions, consisting of $572 million of acquisitions and $324 million of divestments. The $572 million of acquisitions were long WALE strategic properties featuring an average WALE of 13.5 years and a weighted average investment yield of 7.4%. These acquisitions increased CLW's exposure to high-quality tenants, including government, Coles, Telstra, Westpac and Sonic Healthcare. The $324 million of divestments were noncore properties with an average WALE of 8.4 years and a weighted average divestment yield of 4.7%. Divestments included our interest in the Coles Distribution Center in Truganina, which we sold and reinvested the proceeds into the new Coles distribution center in Truganina. This is an attractive WALE-enhancing transaction for CLW, converting a 6.6-year WALE to a 20-year WALE from completion. We also divested a portfolio of 8 Veolia and Cleanaway lease properties. The initial portfolio was acquired in late 2016 and was added to over time, including negotiating lease renewals and extensions over a number of properties. Approximately $100 million of value was created for investors and the sale has crystallized an equity IRR of 16%. Turning to Slide 17. As mentioned on the previous slide, the acquisitions completed during the year have increased CLW's exposure to long WALE critical social infrastructure properties in strategic locations. During the year, we increased our investment in the Telstra Exchanges portfolio of 36 exchange properties leased to best-in-class operator, Telstra Corporation on long triple net leases with a portfolio WALE of 14.4 years. We are also pleased to announce that CLW has acquired a 25% interest in the Sonic Healthcare Pathology Diagnostics facility in Brisbane. This property is a purpose-built facility serving as the primary laboratory for the Queensland, Northern Territory and Northern New South Wales operations of Sonic Healthcare. The transaction was a sale and leaseback to Sonic with Sonic entering into a 20-year triple net lease with annual CPI rent reviews. Turning to Slide 18. CLW derives significant benefits from being part of the Charter Hall platform and having access to the team of over 650 people nationally, managing the portfolio and driving positive outcomes for investors. This includes active asset management, delivering positive leasing outcomes and new long WALE product. At our Coles distribution center in Perth, we reached practical completion of the new Coles storage facility in May 2026. Now that we have reached completion, this has triggered a reset of the lease term remaining over the entire facility to 12 years. Construction of the new Coles distribution center in Truganina, Victoria is progressing ahead of program and is forecast to reach completion in the second half of FY '27. On completion, the facility will be a 68,100 square meter state-of-the-art distribution center and is expected to service all stores in Victoria and Tasmania, and will integrate into Coles' existing supply chain in South Australia and Western Australia with significant investment by Coles in the automation capabilities of the facility. The facility is 100% pre-leased to Coles for an initial lease term of 20 years. This is a strong demonstration of Charter Hall's ability to create long WALE, high-quality investment opportunities for CLW. Importantly, these opportunities are difficult to replicate at scale and highlight the benefits of CLW's access to Charter Hall's sourcing and development platform. Finally, Bunnings has exercised its option for a further 6-year term at our McKay South property. This shifts a lease expiry that was due to occur in FY '27 out by 6 years. Slide 19 is our portfolio overview. At 30 June, the REIT consisted of a portfolio of 505 properties valued at approximately $6.1 billion. The portfolio average cap rate is 5.4%. The portfolio is virtually fully occupied with an occupancy of 99.9% and a long-dated WALE of 9.2 years. CLW has 51% of its income derived from triple net lease properties. This is an important feature of our portfolio given that under a triple net lease structure, the tenant is responsible for all outgoings, maintenance and capital expenditure. The properties in the portfolio are a blend of annual lease review structures, both fixed and CPI-linked. The mix of annual rent reviews resulted in a weighted average annual rent review of 3.1% in FY '26. Turning now to Slide 20 and an outline of our tenant customers and the tenant diversification of the REIT. Our portfolio of long WALE properties is leased to high-quality tenants, including government, Endeavour Group, Telstra, BP, Metcash and Coles. The REIT's largest tenant exposures are to government tenants and best-in-class pub and bottle shop operator, the $6.5 billion Endeavour Group. In the data center and telecommunications sector, we have a partnership with another best-in-class operator, the $55 billion Telstra Corporation, which includes our portfolio of telco exchange properties on long triple net leases. Our BP Australia and New Zealand portfolio of 285 properties on long triple net leases provides us with exposure to the resilient fuel and convenience retail sector. We also have a high proportion of tenants operating in the nondiscretionary grocery and food sectors such as Woolworths, Coles, Metcash and Arnott's. Turning to Slide 21 and the industry diversification of our tenant customers. Within our overall portfolio, approximately 99% of tenants are ASX-listed, government or multinational or national corporations with the vast majority of these tenants operating in nondiscretionary defensive industries. The REIT's major sector exposures are to government, hospitality, convenience retail, grocery and distribution, data centers and telecommunications, grocery and energy and convenience retail. Turning to Slide 22 and the geographic and sector diversification of the REIT. Our portfolio is also diversified by geography and sector type. 79% of the portfolio is located on the Eastern Seaboard in prime locations, while the REIT's largest exposures are to the convenience net lease retail and industrial and logistics sectors. Turning to Slide 23. As can be seen from the chart on this slide, the REIT's portfolio has a long-dated lease expiry profile and reflects a low-risk position relative to our peers in the sector. Our portfolio WALE is a long-dated 9.2 years. We have minimal lease expiries in the near term, and we are in discussions with a number of tenants with expiries in FY '27 and beyond regarding lease renewals and extensions. We continue to work to push out our expiry profile as far as possible to the right of this chart, both through portfolio curation and negotiating lease extensions with our valued tenant customers. On Slide 24, we would like to highlight that the reported WALE of CLW's portfolio understates the likely duration of a significant portion of CLW's income given the critical nature of many of these properties to tenant operations. 51% of CLW's portfolio consists of triple net leases. And if these tenants were to remain in occupation for all option periods under their leases, this would increase the WALE of the portfolio to 30 years today. This is particularly relevant in the context of our Endeavour leased ALE portfolio. This represents approximately 11% of CLW's portfolio by income with an expiry and market review in November 2028, just over 2 years away. This has the effect of reducing reported portfolio WALE. These properties are very important to Endeavour's business operations, and we believe this supports a high likelihood of continued occupation beyond the current lease term. This also represents a significant positive market reversion opportunity for CLW. Turning now to Slide 25 and environmental, social and corporate governance. We remain focused on implementing sustainability initiatives across our portfolio and consider ESG as a driver of long-term value for our investor and tenant customers. As a business, we've taken accelerated climate action. CLW has maintained Net Zero Scope 1 and 2 emissions for assets that fall under the operational control of Charter Hall. Additionally, CLW has been focused on clean energy generation with 8.7 megawatts of solar and 11 megawatt hours of battery capacity installed across its portfolio. CLW's predominantly modern office portfolio features high environmental credentials, including 5.4-star NABERS Energy and 4.7-star NABERS Water ratings. CLW remains committed to aligning with best practice frameworks to support transparency and disclosure. The fund achieved a score of 82 in the 2025 GRESB assessment, a 4-point increase from last year. These preceding slides demonstrate the resilience and strength of our portfolio. Our portfolio WALE, quality of tenants and proportion of triple net leases provides better downside protection and more resilient income streams for our investors. Turning now to Slide 27. In summary, CLW enters FY '27 with a high-quality portfolio, a strengthened balance sheet, long-dated cash flows, embedded rental growth and a clear focus on disciplined capital allocation. Active curation and asset recycling continues to enhance portfolio and tenant quality with recent transaction activity included in the FY '27 guidance. Based on information currently available and barring any unforeseen events, CLW provides FY '27 guidance of operating earnings per security of $0.255 and distributions per security of $0.255. This is a distribution yield of 6.7% based on yesterday's closing price of CLW securities. Finally, I would like to acknowledge and thank the teams of people across the Charter Hall platform that contribute to the performance of CLW and the results delivered today. The Charter Hall Group provides the REIT with access to a high-caliber team of experts across all areas of the REIT's management and provides CLW with access to a best-in-class management platform. That concludes the presentation, and I would now like to invite questions.

[Operator Instructions] Our first question comes from the line of Solomon Zhang with UBS.

First question is just around your '27 guide and the expiries. You've got 3.7% of the portfolio expiring. Just wondering what has been derisked? What is the likely renewal? And do you have any downtime baked into that guidance number?

So the -- yes, we do have some expiries in '27, and we're well progressed in dealing with those. So we are hopeful that in the coming weeks, we'll be able to provide an update to the market on those. So they are factored. We've made some assumptions in our guidance, but we think that they're reasonable in the context of where our negotiations are with tenants in various properties where those expiries exist. I'd love to be able to provide more detail on this.

Any dollar number that you could --

Sorry, what was that?

I was going to ask about a dollar number that you baked in, but so maybe just on Telstra, to what extent has that been derisked given, I think, in August, they would have fully vacated the Canberra asset?

That's right. So, we are undergoing a capital works program on the building at the moment, notwithstanding Telstra is still in occupation on part of that. But when Telstra vacate the balance of that building in September this year, we've assumed that there's no leasing done there for the balance of FY '27 in our guidance, which we think is reasonable given we'll be doing the capital works, and we're underway with our leasing. So I think we're progressing very well with our leasing there. And again, we hope to be able to provide the market with an update in the coming months on that. But yes, there's no income forecast beyond the current occupation in '27.

Second question was just on the hedge book. You've lifted hedging for FY '27 to 85%, which is a good outcome from 71%. But I just noticed that the swap rate is maintained at 3%. So just given market rates are higher than that, could you just comment on how you're able to achieve those attractive hedge rates in the second half where any capital paid for swaps?

Hi, Solomon, yes, it was a combination of new vanilla interest rate swaps and some restructuring of existing swaps from '26 into '27. And we also executed on some interest rate caps, predominantly in FY '28 to effectively manage that interest rate risk while still retaining that ability to participate if rates do come down in '28. But in terms of capital for '27, it was very immaterial in the context of CLW's hedge book and any cost we did pay resulted in a corresponding derivative asset capitalized to the balance sheet.

Our next question comes from the line of Tom Bodor with Jarden.

Can you please confirm your share of JV debt and also comment on where your look-through gearing would be?

Yes, I can comment on that, Tom. So we haven't disclosed look-through gearing in the presentation. And the reason we're not doing that is because we no longer have any look-through debt covenants following the transition to the secured debt platform. So the debt that is held off balance sheet is nonrecourse, and it's specific to each of the JVs and has no cross default. We have about $1.3 billion of debt in our JVs and an average leverage of about 40% to 45% for those JVs that are leveraged. And we think that, that's reasonable in the context of those portfolios like the Endeavour Pubs, BP petrol stations, the Telstra Exchanges, where we can absorb a higher leverage in those long WALE portfolios and that they have covenants of 65% or higher. So it's very sort of manageable in that context, but that's sort of what we can discuss in relation to that.

So that $1.3 billion, just to be very clear, is your share of the debt in those JVs?

That's correct.

Okay. It would be helpful for you to tell us what that is because you present the hedging on a look-through basis and you also present cost in your P&L on a line basis.

I mean it's very easy to determine from the financial statements because we've got $6.1 billion of assets and $4.8 billion of total assets on the balance sheet. So, the difference is obviously the debt and the JVs.

And other liabilities, too?

Yes.

Yes. But the debt is what drives the interest. The other liabilities don't drive interest?

Yes. Other liabilities.

And then on -- in regards to that restructure, I think you talked in the presentation about capital being returned to CLW from the REIT finance within LWIP and BP Australia JVs. Can you just confirm the quantum of capital returned to CLW from those partnerships?

Yes, sure, Tom. That happened post balance date, and it was $160 million that was returned to CLW's balance sheet from those refinances.

And then just a final one. Just be interested in where your marginal cost of debt is.

So our weighted average cost of debt looking forward into FY '27 is obviously driven by the hedging assumptions outlined in the pack with 85% hedging across FY '27 at a fixed rate of 3%. The balance, we've just assumed market floating rates, which today sit about at 4.6% across the next 12 months. So similar to that 4.7% we reported as at June, it will be similar if rates stay where they are over the next 12 months.

Sure. No interest in your marginal cost of debt?

In terms of spot, that would be closer . In terms of the spot rate today sits at 4.6%, layering on our weighted average credit margin, you get up close to that 6%.

Our next question comes from the line of Simon Chan with Morgan Stanley.

Just following up from the previous chat's question. So Erin, keep simple, what's the change in weighted average cost of debt are you expecting between F '26 and F '27?

So Simon, obviously, we reported the 4.7% weighted average cost of debt, and that's a spot at 30 June '26. Over the full FY '26 historic 12 months, it's that closer to 4.5%. So, we do expect a marginal 10 to 15 bps headwind coming into '27.

And that's in our guidance, Simon, already. That's included in our guidance.

Yes, I certainly hope so. I mean Mort Street, you have assumed it to be out of action for a period of time in F '27. Can you confirm for me that because it's going to be undergoing some works, you will be capitalizing the value of that asset?

Capitalizing the costs, yes.

What about the value of the asset? So if the asset value at $100 million, would you be capitalizing the interest of that asset as well and treat the whole thing as a package.

That's right. All the holding costs and development costs will be capitalized.

At the weighted average cost of debt of the company?

Yes.

Our next question comes from the line of David Pobucky with Macquarie Group.

Just a follow-up on the balance sheet position with balance sheet gearing at 27.5%, you're at the lower end of your 25% to 35% balance sheet target range. Just wanting to understand how you think about your capital management strategy from here? And how much capacity do you believe that you have for further acquisitions?

Yes. Well, we're going to manage our capacity within those bands of the 25% to 35% on balance sheet. We've got some capacity for some further acquisitions in that. And we will assess those over time as opportunities get presented to CLW. But yes, that's sort of -- that's how we're thinking about it. And we've got capacity. We've got available debt capacity as well on our balance sheet, having just completed the $2 billion secured debt platform, which was -- which I'll add was oversubscribed by the lenders. So we had very good take-up of that across 10 different lenders, and it's only drawn to about $1.3 billion today. So there's capacity there should we want to use it.

And how does that acquisition transaction pipeline look at the moment? I mean, historically, for example, you've demonstrated pretty good value creation through sale and leaseback transactions. So where do you see the best opportunities today?

Yes. I would certainly, sale and leaseback transactions for us has been a great opportunity set that we've benefited from as we sort of outlined in the slide in the pack. So, there's -- we're fortunate that we do see a good deal flow pipeline in that space, and we continue to do that. So that's certainly one area that I think will be active again and other opportunities that come our way as well across the different sectors. So social infrastructure is one area with Sonic that we've just done, and we're seeing other opportunities there going forward. Industrial with the Coles DC that we did this year, there will be other opportunities like that as well where we're creating into core high-quality product. So it will be, I think that's sort of the nature of the type of deals that we'll be participating in the near term.

And just the final one for me. Just on '27 guidance, you provided a few of the key components already. Have you assumed any accretive transactional activity in your guidance?

No. No, we haven't.

[Operator Instructions] Our next question comes from the line of Richard Jones with JPMorgan.

Just the balance sheet capacity, why are you carrying $700 million of capacity?

Well, we have recently refied, as Erin highlighted earlier, some JV debt that was returned to the balance sheet that's only just recently happened. And it's important to note as well that the nature of the facilities that we're holding that spare capacity in actually have quite low line fees. So we're able to benefit from having the capacity, and we're not paying very much at all for that. Look, we'll assess that over time. But if it doesn't get -- if we don't have a source for it, we may look at reducing that. But at this stage, it's good to have the optionality of having that capacity. And as I mentioned, the line fees on that are relatively low. So it's not costing us a lot to carry.

And is there any JV debt expiring in FY '27?

I think a very small amount, but no, nothing material.

And then just one more question.

The average maturity across our portfolio, including JV debt is the 4.1 years. So it's quite long. The average maturity of our debt is quite long dated.

And I mean it's not overly material, but just curious as to why the DRP is active.

Look, we've been through a journey with the DRP. We had it going for quite some years, then we turned it off. And we had a lot of pushback from investors. And we've decided we turned it on again last year. And I think for the time being, we're going to leave it on just because investors like it and investors don't like it being turned on and off. So for the time being, it's -- we're going to leave it on. If it becomes a real drag and something that doesn't work, we can look at that. But at this stage, we've got no intentions of changing it.

Our next question comes from the line of Suraj Nebhani with Citi.

Just a couple of quick ones. Firstly, are we on the naming of the -- one of the portfolios, you've got data centers in there. Just keen to understand what's changing there? And is there any sort of indications that you guys are looking at data centers now?

No. Look, that's something that's been in the results, Suraj, for the last few periods. They're the Telstra Exchange portfolio that we have, the 36 exchanges that are on long leases to Telstra. Telstra operate a variety of functions out of those properties, both the telephone exchange systems and NBN running through them as well as looking at opportunities where they can do edge data centers and their own data center storage. So that's the nature of that. We're not looking at expanding into data centers beyond that, but it's really a description of the function of those properties across the Telstra portfolio.

And just one more question on the divestment yield. That's pretty sharp at 4.7%. Is it possible to break it down like some of the industrial assets that you've sold in post balance sheet here in Veolia and the Cleanaway assets, are you getting -- like what sort of yields are you getting?

Those Veolia and Cleanaway assets were all sold in the yields in the low 4s. And that combined with things like the Coles DC that was sort of 5. So yes, the average was sub-5 across that portfolio that was sold.

Is there further opportunity for recycling there, Avi?

Absolutely. I mean we're always looking at opportunities across the portfolio where we can recycle into -- from lower yield, lower quality to high-yield, high-quality properties. So it's a constant review that we do. And as we've demonstrated over the last few periods, it's something we've been able to do very successfully, and we'll continue to do that.

[Operator Instructions] I'm showing no further questions in the queue. I would now like to turn the call back over to Avi for closing remarks.

Thanks, everyone, for joining the call today. Appreciate your interest in CLW and look forward to catching up with many of you for one-on-one meetings in the coming days.