Charter Hall Group · ASX:CHC
Charter Hall — Emerging Leaders Conference 2008
21 slides from Charter Hall's conference presentation, Mar 27, 2008
Slide 1: Charter Hall Group Emerging Leaders Conference
For personal use only Charter Hall Group Emerging Leaders Conference 27 March 2008
Slide 2: Content
Content For personal use only • Charter Hall business model • Funds management growth outlook • Investment property fundamentals • Debt financing CHARTER HALL GROUP. EMERGING LEADERS CONFERENCE 08. 2
Slide 3: Charter Hall Business Model
Charter Hall Business Model For personal use only Funds management model drives superior return on equity (ROE) • Table below shows potential for ROE on target co-investment stake of 20% Typical return on core plus investment 11 -12% Base fee of 45bps 4.5% Base Return on Equity 15.5 - 16.5% Potentia
Slide 4: Charter Hall Business Model
Charter Hall Business Model For personal use only Establishment of Umbrella Fund important for Charter Hall business model • CHUF increases capacity for Charter Hall to invest in CHC managed wholesale funds • Facilitates reduction in CHC head stock and look through gearing over time Listed Unlisted
Slide 5: For personal use only
Coles Distribution Centre, Perth WA (CPIF & DPF) For personal use only Bunnings, Stafford QLD (CPRF) 34 Hunter Street, Sydney NSW (CPOF)
Slide 6: Funds Under Management
Funds Under Management Expertise and acquisition capacity focused on enhanced and opportunistic opportunities For personal use only $5.70bn $0.72bn Opportunistic Core Plus $0.66bn Core $4.32bn $0.57bn $3.66bn $0.09bn $0.80bn 1. Includes completion value of assets if core $1.72bn holdings or in deliv
Slide 7: Wholesale Funds Management
Wholesale Funds Management For personal use only • Charter Hall manages – 2 core plus wholesale funds (CPOF and CPIF) – 2 opportunity funds (CHOF4 and CHOF5) • Currently raising capital for Charter Hall Core Plus Retail Fund (CPRF) • Core plus funds are open ended – equity raised as commitments to b
Slide 8: Wholesale Funds Management
Wholesale Funds Management For personal use only Impact of current market conditions on Charter Hall’s wholesale platform • Australian pension funds have limited current appetite for investment in core unlisted property – Fall in LPTs and general equities valuations has consequently increased weight
Slide 9: Wholesale Funds Management
Wholesale Funds Management For personal use only • Wholesale clients comfortable with current investments in Charter Hall funds – Clients believe Charter Hall’s vertically integrated model, quality team and active approach to property funds management will deliver outperformance in current market –
Slide 10: Retail Funds Management
Retail Funds Management For personal use only • Diversified Property Fund (DPF) – Invests in direct property – Diversified portfolio with WALE of 8.4 years – Provides very attractive post tax yield • Umbrella Fund (CHUF) – Invests in Charter Hall managed funds and other managers’ funds – CHUF has 30
Slide 11: Retail Funds Management
Retail Funds Management For personal use only • Retail fund management outlook for Charter Hall – Expect no significant rise in equity inflows in current environment but there is a clear flight to quality – Charter Hall perceived as quality manager with quality investment products – Fewer competitor
Slide 12: For personal use only
400 Kent Street, Sydney Home HQ, Nunawading VIC NSW (DPF & CHIF6) (CPRF) For personal use only Melbourne Airport Business Park, Tullamarine (CPIF)
Slide 13: Investment Property Fundamentals
Investment Property Fundamentals For personal use only • In general terms, current market conditions provide a challenging environment – Global volatility in equity markets – Reduced availability of debt financing and increased cost of debt • Property fundamentals in Australian market remain strong
Slide 14: Investment Property Fundamentals
Investment Property Fundamentals For personal use only • Charter Hall’s property portfolio is well positioned in current market – Strong fixed rental growth across portfolio – Long WALEs – Active lease management – Value add capabilities • Expect in most cases cap rate expansion to be offset by thes
Slide 15: Investment Property Fundamentals
Investment Property Fundamentals For personal use only • Strong fixed rental growth – 60% of the portfolio under fixed lease terms – Weighted average fixed rental growth of 3.6% across portfolio • Long WALE with leases to tenants with excellent covenants – 8.7 years across portfolio – Top ten tenant
Slide 16: Investment Property Fundamentals
Investment Property Fundamentals For personal use only • Active lease management – Current vacancy rate <1% – Strong relationships with key anchor tenants all internally managed • Value add capabilities – Utilise Charter Hall enhanced capabilities Home HQ, Ipswich QLD (CPRF) 275 George St and Northb
Slide 17: For personal use only
Alluvion, Perth WA ONE30 Stirling Street, (CHOF4) Perth WA (CPOF) For personal use only Sydney Wharf, Pyrmont NSW (PDP3)
Slide 18: Debt Financing
Debt Financing For personal use only • Charter Hall has a number of relationship banks – Charter Hall has locked in new finance arrangements since January 2008 across core plus and development opportunities – Borrowing costs increased in line with banks cost of capital • Charter Hall current finance
Slide 19: Debt Financing
Debt Financing For personal use only Charter Hall financing arrangements at 31 December 2007 • Group gearing of 29% with look through gearing at 40% • The key financing metrics are sound with strong interest cover, hedge and duration profiles Entity Drawn CHC Total Gearing Remaining Interest Average
Slide 20: For personal use only
11 Exhibition Street, 1406-1408 Anzac Parade, Melbourne VIC (CPOF) Little Bay NSW (CHOF5) For personal use only Atrium, Pyrmont NSW (CPOF)
Slide 21: Summary
Summary For personal use only • Charter Hall business model – Vertically integrated property funds management model drives superior return on equity • Funds management growth outlook – Lowered expected equity raisings in current market, but positive medium to long term outlook • Investment property
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