Charter Hall Group · ASX:CHC
Charter Hall — H1 FY2022 Earnings Presentation
43 slides from Charter Hall's earnings presentation, Feb 25, 2022
Slide 1: FY22 Half Year Results
FY22 Half Year Results Charter Hall Group 25 February 2022 CharterHall Charter HallGroup Group FY22 2022Half HalfYear YearResults Results
Slide 2: Acknowledgment of Country
Acknowledgment of Country Charter Hall is proud to work with our customers and communities to invest in and create places on lands across Australia. We pay our respects to the traditional owners, their elders past and present, and value their care and custodianship of these lands. Coming Together, 2
Slide 3: Agenda
Agenda David Harrison Managing Director & Group CEO 1. Highlights and Strategy 2. Group Funds Management Sean McMahon Chief Investment 3. Property Investment Officer 4. Financial Result 5. Outlook and Guidance 6. Additional Information Russell Proutt Chief Financial Officer Cover: 10 Shelley Street,
Slide 4: Highlights and Strategy
1 Highlights and Strategy Australia Post, Chullora Logistics Park, Sydney (CPIF) CharterHall Charter HallGroup Group FY22 2022Half FY22 HalfYear YearResults Results Results
Slide 5: Group highlights
Highlights and Strategy Group highlights1 Group Returns Property Investments Funds Management Investment Capacity Operating earnings (6 months) Property Investment portfolio Group FUM5 Group investment capacity 7 $264 million $2.8bn $79.5bn up 52.0% in 6 months $6.7bn Statutory profit 2 (6 months) U
Slide 6: Our strategy
Highlights and Strategy Our strategy We use our expertise to access, deploy, manage and invest equity to create value and generate superior returns for our investor customers Access Deploy Manage Invest Accessing equity from listed, Creating value through attractive Funds management, asset managemen
Slide 7: Operating earnings per security growth
Highlights and Strategy Operating earnings per security growth Operating earnings per security growth Distributions per security growth 112.0cps 2 DPS (grossed up) 3 OEPS (post-tax) cps DPS (cash paid) 44.4cps 43.4cps 40.0cps 36.9cps 69.3cps 37.9cps 35.7cps 61.0cps 33.7cps 31.8cps 56.6cps 30.0cps 47
Slide 8: Charter Hall performance
Highlights and Strategy Charter Hall performance Outperformance relative to AREIT Index Total Shareholder Return vs S&P/ASX 200 Property Accumulation Index (XPJAI) (Compound Annual Growth Rate) CHC XPJAI 44.5% p.a. 43.0% p.a. 39.1% p.a. 32.4% p.a. 26.1% p.a. 19.7% p.a. 13.8% p.a. 12.8% p.a. 9.3% p.a
Slide 9: Group Funds Management
2 Group Funds Management Tradecoast Industrial Park, Pinkenba (CPIF) Charter CharterHall HallGroup Group FY22 2022Half YearResults HalfYear Results Results
Slide 10: Funds Under Management (FUM) growth
Group Funds Management Funds Under Management (FUM) growth Property FUM growth of 17.2% from $52.3bn to $61.3bn Group FUM growth ($bn) Property FUM by equity source ($bn) $61.3bn $79.5bn Group FUM $9.9bn $52.3bn $18.2bn PIM Partnership $8.2bn $12.9bn $3.9bn $1.1bn $40.5bn $5.4bn ($1.3bn) $10.8bn $6.
Slide 11: Group funds management portfolio
Group Funds Management Group funds management portfolio Diversification of equity sources and by sector Group FUM by equity source Group FUM by sector Direct (Retail) Equity $10.4bn Listed Equities Industrial & Logistics 13.0% $18.5bn $19.1bn 23.3% 24.0% Listed Funds $12.9bn 16.2% $79.5bn Wholesale
Slide 12: Property funds management portfolio
Group Funds Management Property funds management portfolio Largest property portfolio in Australia Portfolio value Lettable area No. of Net rent WALE Occupancy WACR Property FUM ($bn) (m sqm) Properties ($m) (years) (%) (%) 31 December 2021 61.3 10.1 1,516 2,698 8.8 97.8 4.47 30 June 2021 52.3 9.0 1
Slide 13: Diversified tenant customers
Group Funds Management Diversified tenant customers The top 20 tenants are represented by Government, multinationals & listed companies – 24% of platform leases are NNN – 25% of platform net income is CPI-linked – 37% of property platform income is from net effective leases (no incentives) Top 20 pl
Slide 14: 1H FY22 property transaction activity
Group Funds Management 1H FY22 property transaction activity $6.8bn of transaction activity, comprising over 60 transactions with 18 active funds/partnerships Industrial & Long WALE Social Shopping Office Infrastructure / Total Logistics Retail Other Centre Retail Acquisitions ($bn) 1.7 1.8 1.6 0.2
Slide 15: Sale and leaseback activity
Group Funds Management Sale and leaseback activity Charter Hall is the market leader in Australian sale and leaseback partnerships Charter Hall sale and leaseback Existing Charter Hall sale and leaseback partnerships transactions 1 (by tenant industry) Other Government & Capital goods 8% universitie
Slide 16: Development to drive deployment and FUM growth
Group Funds Management Development to drive deployment and FUM growth Development pipeline increased by 50% to $13.2bn – 88% of Industrial committed projects are pre-leased – 78% Office committed projects are pre-leased Completion value($m) Completions Committed Uncommitted Total (last 12 projects p
Slide 17: Equity inflows
Group Funds Management Equity inflows1 ($m) FY19 FY20 FY21 1H FY22 - Strong period of inflows from all equity sources Wholesale pooled funds 1,802 1,272 2,111 650 - Continued growth in Wholesale pooled funds and partnerships Wholesale partnerships 219 1,298 1,448 801 - Growth in equity inflows conti
Slide 18: Property Investment
CharterHall Charter FY22 HallGroup 2022Half FY22 Group HalfYear YearResults Results Results 3 Property Investment 45-61 Waterloo Road, Macquarie Park 10 year lease to State Government (CLW & PFA)
Slide 19: Property Investment portfolio
Property Investment Property Investment portfolio Property Investment value increased by 18% to $2.85bn Portfolio Value No. of WALE Occupancy WARR WACR WADR ($bn) Properties (years) (%) (%) (%) (%) 31 December 2021 2.85 1,445 8.6 97.4 3.2 4.62 5.8 30 June 2021 2.41 1,322 9.1 97.4 3.1 4.86 6.0 Sector
Slide 20: Property Investment portfolio movement
Property Investment Property Investment portfolio movement PI yield of 6.0% remains attractive Property Investment portfolio movement Property Investment portfolio yield $2,841m 10.0% $165m $2,841m $2,409m 8.0% $267m $2,028m $1,844m $1,706m 6.0% $1,527m 4.0% $2,409m 2.0% - Jun-21 Change in Net inves
Slide 21: Diversified Property Investment earnings
Property Investment Diversified Property Investment earnings Property Investment portfolio provides growth and resilience given quality and strong tenant customer composition – 3.3% fixed reviews with 24% of CHPT net income is CPI-linked – 70% repeat and 34% multi-sector customers across 2,297 lease
Slide 22: ESG Leadership
Property Investment ESG Leadership Partnering with tenant and investor customers to deliver meaningful change Climate Resilience Strong Communities Transparency & Disclosure Focusing on onsite and offsite renewables Delivering social value Aligning with best practice frameworks and rating tools $1.4
Slide 23: Financial Result
CharterHall Charter FY22 HallGroup 2022Half Group HalfYear YearResults Results 4 Sydney Financial Result 23
Slide 24: Earnings summary
Financial Result Earnings summary ($m) 1H FY21 1H FY22 Change % PI EBITDA 60.4 71.6 18.5% DI EBITDA 7.2 27.0 275.0% - PI EBITDA increased by 18.5%, as a result of FM EBITDA 1 97.1 256.5 164.2% increased investments activity EBITDA 164.7 355.1 115.6% - DI increased significantly due to key Depreciati
Slide 25: Funds management
Financial Result Funds management ($m) 1H FY21 1H FY22 Change % Fund management fees 89.3 114.7 28.5% Transaction and performance fees 27.1 177.2 553.7% - Funds management fees up 28.5% driven by 116.4 291.9 150.8% Investment management revenue continued momentum in FUM growth Property, facilities a
Slide 26: Balance sheet and return metrics
Financial Result Balance sheet ($m) 30 Jun 2021 31 Dec 2021 and return metrics Cash Property investment 344 2,409 229 2,842 Development investment 76 69 - Available cash of $229 million Receivables 107 214 Other assets1 16 271 - Other assets include PIM partnership Intangibles 115 114 - Balance shee
Slide 27: Capital management
Financial Result Capital management Funds platform debt metrics1 30 Jun 2021 31 Dec 2021 Total facility limits ($m) 20,089 23,470 - $6.7bn of available liquidity plus committed Total undrawn debt ($m) 5,043 5,238 and uncalled equity Total cash ($m) 1,634 1,477 - $9.4bn of new and refinanced debt fac
Slide 28: Outlook and Guidance
5 Outlook and Guidance Bunnings, Gladesville (LWHP) Charter CharterHall HallGroup Group 2021 Full Year Results 2022 Half Year Results
Slide 29: FY22 operating earnings guidance
Outlook and Guidance FY22 operating earnings guidance Based on no material adverse change in current market conditions, FY22 guidance is for post-tax operating earnings per security of no less than 112 cents. FY22 distribution per security guidance is for 6% growth over FY21. Guidance of 84% OEPS gr
Slide 30: Additional Information
CharterHall Charter FY22 HallGroup 2022Half FY22 Group HalfYear YearResults Results Results 6 Additional Information 130 Lonsdale Street, Melbourne (CPOF)
Slide 31: Management bench experience
Additional Information Management bench experience Charter Hall Executive leadership group David Harrison Managing Director & Group CEO 34 years industry experience Sean McMahon Russell Proutt Carmel Hourigan Richard Stacker Natalie Devlin Ben Ellis Steven Bennett Sheridan Ware Chief Investment Chie
Slide 32: Property footprint
Additional Information Charter Hall Group Property footprint1 0.1bn $ 10.3bn $ $ 4.8bn 3.0bn $ 26.0bn $ 0.4bn $ 15.4bn $ 0.6bn $ Charter Hall Group 1. Excludes Maxim and other smaller investments FY22 Half Year Results 32
Slide 33: Charter Hall managed funds
Additional Information Charter Hall managed funds Industrial Social SC Listed Long WALE Retail Office & Logistics Infrastructure Retail Equities $19.1bn $9.4bn $24.9bn $3.4bn $4.2bn $18.5bn 1 4 6 7 9 Australian Wholesale CPIF CLP LWHP LWIPs LEP CPOF CHOT BSWF CHET CPRF Equities Equity $10.3bn $2.5bn
Slide 34: Wholesale pooled and partnerships property funds
Additional Information Wholesale pooled and partnerships property funds FUM Gearing $ 38.5bn 26.8% Occupancy WALE 97.1% 8.1yrs Cap rate CHC investment 4.32% $ 1.5bn 275 George Street, Brisbane (CPOF) Charter Hall Group FY22 Half Year Results 34
Slide 35: Major wholesale property investment portfolio returns
Additional Information Major wholesale property investment portfolio returns Relative to sector specific IPD/MSCI Core Wholesale indices 20.1% 16.8% 15.6% 15.0% 15.0% 15.0% 15.0% 12.2% 11.0% 11.0% 7.8% 7.8% CHOT CPOF CPIF CLP LWHP LWIP 2016 to 2021 2016 to 2021 2016 to 2021 2016 to 2021 2016 to 2021
Slide 36: Listed
Additional Information Listed FUM Gearing $ 12.9bn 28.6% Occupancy WALE 99.2% 10.6yrs Cap rate CHC investment1 4.77% $ 0.8bn Mater, 14 Stratton Street, Newstead (CQE) 1. Held at accounting value not market value Charter Hall Group FY22 Half Year Results 36
Slide 37: Charter Hall Direct
Additional Information Charter Hall Direct FUM Gearing $ 9.9bn 32.3% Occupancy WALE 98.4% 8.6yrs Cap rate CHC investment 4.64% $ 0.5bn 40 Bunda Street, Canberra (PFA) Charter Hall Group FY22 Half Year Results 37
Slide 38: Direct funds have returned an average of 13.9% p.a. since inception
Additional Information Direct funds have returned an average of 13.9% p.a. since inception Outperforming their respective MSCI/IPD indices1 by over 1.6x 25.0% 21.3% 20.0% 19.1% 16.3% 16.1% 15.1% 15.0% 12.3% 11.5% 11.1% 10.1% 10.0% 8.8% 8.8% 8.9% 8.8% 9.0% 7.0% 7.3% 6.8% 5.9% 5.0% 0.0% 3 3 3 3 4 DOF
Slide 39: CHPT Property Investment portfolio
Additional Information CHPT Property Investment portfolio Charter Hall Charter Hall Ownership stake Investment PI Income WALE WACR WADR WARR1 PI Yield2 (%) ($m) ($m) (years) (%) (%) (%) (%) Industrial & Logistics Charter Hall Prime Industrial Fund (CPIF) 1.8 133.8 2.4 10.1 3.9 5.5 3.0 4.4 Charter Ha
Slide 40: Statutory balance sheet reconciliation
Additional Information Statutory balance sheet reconciliation Adj. 1: Adj 2: Investor Presentation ($m) Statutory Balance Sheet Reclassify LWF as Equity Reclassify mark-to-market on (slide 26) Accounted investment derivatives Cash 250 (21) - 229 Property Investment 2,774 68 - 2,841 Development Inves
Slide 41: Portfolio performance fee testing frequency
Additional Information Portfolio performance fee testing frequency Fund Testing frequency Brisbane Square Wholesale Fund (BSWF) 3 yearly – FY22, FY25, etc Charter Hall Direct Industrial Fund No. 4 (DIF4) 5 yearly – FY22, FY27, etc Charter Hall Prime Industrial Fund (CPIF) 3 yearly – FY22, FY25, etc
Slide 42: Fund key and glossary
Additional Information Fund key and glossary Listed entities Wholesale funds ASX:CHC Charter Hall Group BSWF Brisbane Square Wholesale Fund ASX:CLW Charter Hall Long WALE REIT CCT Charter Hall Counter Cyclical Trust ASX:CQR Charter Hall Retail REIT CHAB247 Charter Hall Abacus 247 Adelaide Street Tru
Slide 43: Further information
Further information Investor Relations Tel 1300 365 585 (within Australia) +61 2 8651 9000 (outside Australia) Email reits@charterhall.com.au Presentation authorised by the Board charterhall.com.au/chc IMPORTANT NOTICE & DISCLAIMER This presentation has been prepared by Charter Hall Funds Management