Why Is Charter Hall Long WALE REIT Reactivating Its DRP Now?

• DRP reactivated for 30 September 2025 distribution
• Eligible securityholders can reinvest distributions into additional stapled securities
• Participation is optional and subject to eligibility criteria
• No brokerage or transaction costs for participants
• Administrators retain discretion over issuance or transfer of securities

Reactivation of the DRP

Charter Hall Long WALE REIT (ASX, CLW) has officially reactivated its Distribution Reinvestment Plan (DRP) for the quarterly distribution due on 30 September 2025. This move allows eligible securityholders to reinvest their distributions directly into additional stapled securities of the REIT, either through the issuance of new securities or the transfer of existing ones. The reactivation signals a strategic approach by the REIT to offer investors a convenient and cost-effective way to compound their investment without incurring brokerage or transaction fees.

Participation and Eligibility

Participation in the DRP is entirely optional and open to securityholders with registered addresses in Australia or New Zealand, subject to certain eligibility criteria. Those holding securities on behalf of persons outside these jurisdictions may face restrictions. Securityholders wishing to participate must lodge an application with the security registrar before the specified deadline, which is the business day following the distribution record date. The plan accommodates both full and partial participation, allowing investors to tailor their reinvestment according to their preferences.

Mechanics and Administration

The DRP operates by applying distributions payable on participating stapled securities towards acquiring additional securities. The number of securities issued or transferred is calculated based on the distribution amount, adjusted for any withholding tax, and divided by the average market price over a defined period following the record date. The administrators have the discretion to determine whether new securities are issued or existing securities are transferred to participants. Importantly, no brokerage, commissions, or stamp duty costs are passed on to participants, enhancing the attractiveness of the plan.

Flexibility and Control

Securityholders retain the ability to vary or cancel their participation in the DRP at any time by submitting a notice to the security registrar. The plan also includes provisions for handling residual balances and outlines the responsibilities and powers of the administrators in managing the plan. The administrators may suspend or terminate the plan at their discretion, ensuring flexibility in response to market conditions or strategic considerations.

Strategic Implications

Reactivating the DRP may reflect Charter Hall Long WALE REIT’s confidence in its portfolio and its intent to encourage long-term investor engagement. By facilitating reinvestment without additional costs, the REIT potentially strengthens its capital base and supports liquidity in its stapled securities. However, the discretion retained by administrators regarding the issuance or transfer of securities introduces an element of uncertainty about the impact on the REIT’s capital structure.

Bottom Line?

The DRP’s reactivation offers investors a seamless reinvestment option, but its uptake and pricing will be key to watch.

Questions in the middle?

• What discount, if any, will be applied to the reinvestment price under the DRP?
• How many securityholders are expected to participate in this DRP cycle?
• Will the administrators lean towards issuing new securities or transferring existing ones?