Charter Hall Group · ASX:CHC
Charter Hall — H1 FY2024 Earnings Presentation
43 slides from Charter Hall's earnings presentation, Feb 21, 2024
Slide 1: Charter Hall Group 2024 Half Year Results
Charter Hall Social Infrastructure REIT Charter Hall Group 2024 Half Year Results 2023 Full Year Results
Slide 2: Agenda
Acknowledgement of Country Charter Hall acknowledges the Traditional Custodians of the lands on which we work and gather. We pay our respects to Elders past and present and recognise their continued care and contribution to Country. Agenda 1. Highlights and Strategy 2. Group Funds Management 3. Prop
Slide 3: Highlights and Strategy
1CharterHall Charter Sydney 2024 HallGroup 2024Half Group (CPOF) HalfYear YearResults Results Highlights and Strategy Artist impression: Chifley South Development Charter Hall Group 2024 Half Year Results
Slide 4: Group highlights
Highlights and Strategy Group highlights1 Group Returns Property Investments Funds Management Investment Capacity Operating earnings Property Investment portfolio Group FUM4 Group investment capacity2 $195 million $2.8bn $82.6bn $6.0bn FM Margin Property FUM $67.7bn 70.5% Balance sheet OEPS Property
Slide 5: Our Strategic Pillars
Highlights and Strategy Our Strategic Pillars1 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
Slide 6: Operating earnings growth
Highlights and Strategy Operating earnings growth Operating earnings and distributions growth - Strength of underlying retained earnings driving DPS (cash paid) fund creation and growth OEPS (post-tax) - Consistent DPS growth of 6.0% from FY19 to 115.6cps FY24 - 1H FY24 OEPS of 41.2cps and DPS of 22
Slide 7: FM EBITDA margins
Highlights and Strategy FM EBITDA margins FM EBITDA margins, FY18-1H FY24 (%) - Margin expansion over 5yrs achieved through platform scale - Funds management margin excluding transaction and performance fee continues to expand given strong operational efficiency 73.0% 70.5% 68.2% - Full year margins
Slide 8: Group Funds Management
2Midwest Logistics Hub Truganina (CPIF) Group Funds Management CharterHall Charter HallGroup Group Charter Hall Group 2024 2024Half HalfYear YearResults Results 2024 Half Year Results
Slide 9: 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 Social Infrastructure $3.6bn SC Retail 4.3% Direct (Unlisted) Equity Wholesale (Unlisted) Equity $4.2bn $9.9bn $59.7bn 5.1% 12.0% 72.3% Convenience N
Slide 10: Property Funds Under Management (FUM) growth
Group Funds Management Property Funds Under Management (FUM) growth Total property FUM of $67.7bn Property FUM growth ($bn) Property FUM by equity source ($bn) ($0.9bn) 4.5-year Property FUM CAGR of 19.5% $0.5bn ($3.5bn) $0.6bn ($0.8bn) 80.0 Wholesale 21.0% $71.9bn 75.0 Listed 17.4% $71.9bn $67.7bn
Slide 11: Property funds management portfolio
Group Funds Management Property funds management portfolio Largest diversified property portfolio in Australia Portfolio value Lettable area No. of Net rent WARR WALE Occupancy WACR Property FUM ($bn) (m sqm) Properties ($m) (%) (years) (%) (%) 31 December 2023 67.7 11.5 1,641 3,245 3.6 7.9 97.6 5.1
Slide 12: Diversified tenant customers
Group Funds Management Diversified tenant customers The top 20 tenants are represented by Government, multinationals and listed companies – The top 20 tenants represent 56% of property platform income – 23% of platform leases are NNN and 22% of platform net income is CPI-linked – 72% multi-lease ten
Slide 13: Modern, high-occupancy office platform
Group Funds Management Modern, high-occupancy office platform Strong leasing momentum with 97,393 sqm leased1 across 111 transactions – 6.8 year WALE achieved on all transactions nationally – 95.6% office portfolio occupancy versus national average of 84.5%2 – CPOF continues to have leading sector o
Slide 14: Modern, high-occupancy Industrial & Logistics portfolio
Group Funds Management Modern, high-occupancy Industrial & Logistics portfolio Strong leasing momentum with 223,087 sqm leased across 29 transactions – 6.3 year WALE achieved on all transactions nationally – 99.4% Industrial & Logistics portfolio occupancy versus national average of 98.9%1 – 9.2 yea
Slide 15: Equity inflows
Group Funds Management Equity inflows ($m) FY21 FY22 FY23 1H FY24 - Diverse sources of equity across Wholesale, Listed and Direct Wholesale pooled funds 2,111 1,575 817 249 - Wholesale flows weighted towards partnerships Wholesale partnerships 1,448 1,137 1,432 552 - ~100+ wholesale investors Listed
Slide 16: 1H FY24 property transaction activity
Group Funds Management 1H FY24 property transaction activity $1.5bn of transaction activity, comprising over 35 transactions with 12 active funds/partnerships Social Industrial & Convenience Net Shopping Office Infrastructure / Total Logistics Lease Retail Centre Retail Other Acquisitions ($bn) 0.4
Slide 17: Development to drive deployment and FUM growth
Group Funds Management Development to drive deployment and FUM growth Development completions of $3.0bn over the last 12 months – 91% of Industrial committed projects are pre-leased – 66% of Office committed projects are pre-leased1 Completion value ($m) Completions Committed Uncommitted Total (last
Slide 18: Property Investment
3 480 Swan Street Richmond (CPOF) Property Investment CharterHall Charter HallGroup Group 2024 2024Half HalfYear YearResults Results Results
Slide 19: Property Investment portfolio
Property Investment Property Investment portfolio Property Investment portfolio of $2.8bn Portfolio Value No. of WALE Occupancy WARR WACR WADR ($bn) Properties (years) (%) (%) (%) (%) 31 December 2023 2.8 1,637 7.3 97.0 3.5 5.24 6.5 30 June 2023 3.0 1,576 7.4 97.6 3.6 4.91 6.1 Sector allocation Geog
Slide 20: Property Investment Portfolio growth
Property Investment Property Investment Portfolio Property Investment portfolio yield: 4.4% growth 10.0% - Net investments of $108m since June 2023 $2,918m $2,951m - Investment portfolio 4.5-year CAGR of ~9.0% $2,760m p.a. 8.0% - Retained earnings driving co-investments and $2,409m supporting new fu
Slide 21: Diversified Property Investment earnings
Property Investment Diversified Property Investment earnings Property Investment earnings (by sector) - Property Investment portfolio provides growth Listed Equities/ Other and resilience given quality and strong tenant 6% customer composition Social Infrastructure 6% - No single asset is more than
Slide 22: ESG Leadership
Property Investment ESG Leadership Achievements in 1H FY24 Focus areas in FY24+ Progressing towards Net Zero Investing in clean energy $6bn of sustainable finance Climate action Environment transactions to date, an increase of Established near-term and long-term Long Term PPA to supply 100% Continue
Slide 23: Financial Result
4 Coles Distribution Centre Edinburgh (DIF4) Financial Result CharterHall Charter HallGroup Group Charter Hall Group 2024 2024Half HalfYear YearResults Results 2024 Half Year Results
Slide 24: Earnings summary
Financial Result Earnings summary ($m) 1H FY23 1H FY24 Change % PI EBITDA 66.5 71.2 7.0% DI EBITDA 30.4 34.7 14.0% - PI EBITDA increased by 7.0% as a result of FM EBITDA 1,2 229.4 159.3 (30.6%) increased investments activity EBITDA 326.3 265.1 (18.8%) - FM EBITDA of $159.3m reflects management Depre
Slide 25: Funds management
Financial Result Funds management ($m) 1H FY23 1H FY24 Change % Funds management revenue 150.9 153.9 2.0% Transaction and performance revenue 96.0 16.3 (83.0%) - 1H FY23 FM EBITDA included $96.0m of Investment management revenue 247.0 170.2 (31.1%) transaction and performance revenue compared to $16
Slide 26: Balance sheet and return metrics
Financial Result Balance sheet ($m) 30 Jun 2023 31 Dec 2023 and return metrics Cash Property investment 401 2,951 401 2,760 Development investment 131 106 - Available cash of $401 million Receivables 140 88 Other assets1 314 232 - Strong balance sheet maintained with low gearing at 2.4% Intangibles
Slide 27: Platform capital profile and gearing
Financial Result Platform capital profile Funds platform debt metrics1 30 Jun 2023 31 Dec 2023 Total facility limits ($m) 29,068 29,611 Total undrawn debt ($m) 5,171 5,272 - $6.0bn of available liquidity plus committed Total cash ($m) 852 763 and uncalled equity Weighted average debt maturity (yrs.)
Slide 28: Guidance
5 Innovation Quarter Charter Hall Group Westmead (CQE & PFA) 2022 Half Year Results Guidance Charter CharterHall HallGroup Group 2024 Half Year Results 2024 Half Year Results
Slide 29: FY24 operating earnings guidance
Guidance FY24 operating earnings guidance Based on no material change in current market conditions, Charter Hall reconfirms FY24 guidance of post-tax operating earnings per security of approximately 75 cents. FY24 distribution per security guidance is for 6% growth over FY23. 555 Collins Street, Mel
Slide 30: Additional Information
CharterHall Charter 2024 HallGroup 2024Half Group HalfYear YearResults Results Results 6 Charter Hall Offices Additional Information No.1 Martin Place, Sydney (CHOT)
Slide 31: Management bench experience
Additional Information Management bench experience Charter Hall Executive Committee (EXCO) David Harrison Managing Director & Group CEO 36 years industry experience Sean McMahon Anastasia Clarke Carmel Hourigan Richard Stacker Natalie Devlin Ben Ellis Steven Bennett Chief Investment Chief Financial
Slide 32: Property Platform
Additional Information Charter Hall Group Property Platform1 $ 0.1bn 11.1bn $ 4.8bn $ $ 3.0bn 28.8bn $ $ 17.6bn 0.7bn $ Charter Hall Group 2024 Half Year Results 1. Excludes Maxim and other smaller investments 0.5bn $ 32
Slide 33: Charter Hall investment strategies
Additional Information Charter Hall investment strategies Institutional Wholesale Listed Funds Retail/ HNW $59.7bn $13.0bn $9.9bn Pooled Partnerships Listed CPIF Industrial PIM ASX:CLW Industrial $12.9bn $6.6bn $14.5bn $6.5bn $3.8bn CPOF Office ASX:CQR Office $9.7bn $11.2bn $4.2bn $5.0bn Retail ASX:
Slide 34: Charter Hall sector valuation movement – December 2023
Additional Information Charter Hall sector valuation movement – December 2023 Valuation Valuation Cap rate Cap rate Dec 2023 movement movement increases increases cap rate (6 months) (12 months) (6 months) (12 months) Industrial & Logistics (5.2%) (5.3%) 57 bps 92 bps 5.0% Convenience Net Lease Reta
Slide 35: Wholesale pooled and partnerships property funds
Additional Information Wholesale pooled and partnerships property funds FUM Gearing $ 45.2bn 35.4% Occupancy WALE 96.5% 7.4yrs Cap rate CHC investment 5.03% $ 1.6bn 130 Lonsdale Street, Melbourne (CPOF) Charter Hall Group 2024 Half Year Results 35
Slide 36: Major wholesale property investment portfolio returns
Additional Information Major wholesale property investment portfolio returns Relative to sector specific IPD/MSCI Core Wholesale indices 16.4% 15.1% 11.6% 12.0% 12.0% 8.4% 8.4% 4.4% 3.8% 3.8% 3.1% 3.1% CHOT CPOF CPIF CLP LWHP LWIP 2018 to 2023 2018 to 2023 2018 to 2023 2018 to 2023 2018 to 2023 2018
Slide 37: Listed
Additional Information Listed FUM Gearing1 $ 13.0bn 32.9% Occupancy WALE 99.3% 9.8yrs Cap rate CHC investment2 5.30% $ 0.8bn Eastgate, Bondi Junction (CQR) 1. Reflects aggregate balance sheet gearing of all listed REITs 2. Held at accounting value not market value Charter Hall Group 2024 Half Year R
Slide 38: Charter Hall Direct
Additional Information Charter Hall Direct FUM Gearing $ 9.5bn 41.0% Occupancy WALE 99.4% 7.2yrs Cap rate CHC investment 5.48% $ 0.4bn Bunnings, 159 Princes Highway, South Nowra (DIF4) Charter Hall Group 2024 Half Year Results 38
Slide 39: Direct funds have returned an average of 8.1% p.a. since inception
Direct funds have returned an average of 8.1% p.a. since inception 25% 20% 14.9% 15% 13.6% 10.1% 9.8% 10% 9.4% 8.6% 8.1% 6.7% 6.7% 6.8% 5.6% 4.5% 4.5% 5.0% 5% 4.3% 2.4% - (2.4%) (2.3%) (5%) 1 1 1 DOF PFA DIF3 DIF4 BW Trust LWF WPS1 WPS2 Maxim2 2014-2023 2017-2023 2014-2023 2016-2023 2014-2023 2017-2
Slide 40: CHPT Property Investment portfolio
Additional Information CHPT Property Investment portfolio Charter Hall Charter Hall Ownership stake Investment PI Income WALE WACR WADR WARR PI Yield1 (%) ($m) ($m) (years) (%) (%) (%) (%) Industrial & Logistics Charter Hall Prime Industrial Fund (CPIF) 1.3 113.0 2.1 9.3 4.9 6.8 3.4 3.5 Charter Hall
Slide 41: Major performance review testing periods
Additional Information Major performance review testing periods Fund Testing frequency Charter Hall Direct BW Trust (BW Trust) FY24 Core Logistics Partnership (CLP) 3 yearly - FY24, FY27, etc plus individual asset divestments FY24 Charter Hall Prime Office Fund (CPOF) 3 yearly – FY24, FY27, etc Coun
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