Charter Hall Retail Reit · ASX:CQR
Charter Hall Retail Reit — H1 2012 Earnings Presentation
49 slides from Charter Hall Retail Reit's earnings presentation, Feb 17, 2012
Slide 1: 2012 Half Year Results
Charter Hall Retail REIT For personal use only 2012 Half Year Results 17 February 2012
Slide 2: Important Notice
Important Notice For personal use only Charter Hall Retail Management Limited ABN 46 069 709 468; AFSL 246996 (“CHRML”) has issued this presentation in its capacity as the responsible entity of Charter Hall Retail REIT ARSN 093 143 965 (“CQR”). This presentation has been prepared for general inf
Slide 3: Contents
Contents For personal use only Scott Dundas 1 Half Year Results Acting Chief Executive Officer Scott Dundas 2 Portfolio Investments Acting Chief Executive Officer John Courtney 3 Operational Performance Head of Asset Management (Retail) Philip Schretzmeyer 4 Financial Performance General Manager Fin
Slide 4: Half Year Results
Charter Hall Retail REIT For personal use only 01 Half Year Results
Slide 5: Charter Hall Retail REIT
Charter Hall Retail REIT For personal use only Specialist REIT with over 16 year track record of owning and managing Australian retail properties Invests in high quality supermarket anchored neighbourhood & sub-regional shopping centres Non-discretionary retail focus delivering strong operatio
Slide 6: Financial results – six months ended December 2011
Half Year Results For personal use only Financial results – six months ended 31 December 2011 Earnings: Balance Sheet: Statutory profit: $4.3m; 1.44 cpu Net tangible assets (NTA): $1,029m; $3.43 pu Operating earnings: $41.7m; 13.92 cpu Portfolio valuation: $1,904m; 8.29% cap rate Distribut
Slide 7: Highlights
Highlights For personal use only Resilient Same property net operating income (NOI) growth of 3.5% Occupancy at 98.7% Domestic Rental rate growth of 4.1% on 159 specialty leasing transactions Portfolio Specialty occupancy cost of 8.2% Acquired three properties valued at $90m1 at average in
Slide 8: Geographic Analysis
Geographic Analysis For personal use only 31 December 2011 DOMESTIC OFFSHORE Australia Poland Germany Other1 Total NTA (A$m) 939 49 10 31 1,029 NTA per unit ($) 3.14 0.16 0.03 0.10 3.43 Proportion of total NTA 91% 5% 1% 3% 100% Balance sheet gearing 30.1% 70.1% 89.4% 27.3% 39.1% Property portfolio N
Slide 9: Unit Price Performance
Unit Price Performance For personal use only 60% 58.3% Annualised total returns 50% 40% 30% 56.4% outperformance 20% 17.7% 10% 19.2% 4.0% outperformance 8.6% 1.9% outperformance 0% (1.5%) (4.6%) -10% Six months One year Three years CQR S&P/ASX 200 Prop Acc Index Source: UBS Australia All returns cal
Slide 10: Portfolio Investments
Charter Hall Retail REIT For personal use only 02 Portfolio Investments
Slide 11: Revaluations
Revaluations For personal use only Australia Retail property yields showing a marginal increase since June 2011 Offsetting this movement, NOI growth from the REIT‟s resilient portfolio resulted in a net increase in valuations Poland Whilst uncertainty in European markets caused cap rates to in
Slide 12: Revaluations
Revaluations For personal use only Six months to December 2011 Australia Poland Germany Other1 Total Number of properties 72 5 2 11 90 Percentage externally valued December 20112 40% 13% 3% - 56% December 2011 valuation (A$m) 1,471.8 243.7 111.8 77.0 1,904.3 Prior book value3 (A$m) 1,470.9 244.6 125
Slide 13: Australian Acquisitions
Australian Acquisitions For personal use only Strategy: Selectively acquire supermarket anchored shopping centres with strong capital and income growth potential Sector: Neighbourhood and sub-regional supermarket anchored Asset value: $20 million - $80 million per asset Financial metrics: Five
Slide 14: Non-core Asset Disposals
Non-core Asset Disposals For personal use only Majority of equity now realised from United States portfolio Proceeds reinvested into quality Australian grocery anchored properties Undertaking review of Australian properties for selective capital recycling Gross sale price Net proceeds Disposal
Slide 15: Operational Performance
Charter Hall Retail REIT For personal use only 03 Operational Performance
Slide 16: Portfolio Summary
Portfolio Summary For personal use only DOMESTIC OFFSHORE December Australia Poland Germany Other June 2011 2011 Number of properties 72 5 2 11 90 93 Number of tenancies 1,598 330 92 135 2,155 2,140 Valuation (A$m) 1,471.8 243.7 111.8 77.0 1,904.3 1,931.0 Performance metrics Same property NOI growth
Slide 17: Australian Portfolio
Australian Portfolio For personal use only Acquisitions have improved overall portfolio quality Key metrics remain strong ― Solid occupancy ― Continued income growth Rental rate growth of 4.1%: ― 3.1% on 82 new leases ― 5.1% on 77 renewals 1. Excludes properties under redevelopment 2. Calculat
Slide 18: Australian Portfolio: Historical Performance
Australian Portfolio Historical Performance – Defensive and Stable For personal use only CQR portfolio: 100% 6% 99% 5% 98% 4% 97% 3% 96% 2% 95% 1% 94% 0% Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Occupancy (LHS) Same property NOI growth (RHS) Australian economic statistic
Slide 19: Australian Portfolio: Anchor Tenants
Australian Portfolio Anchor Tenants For personal use only Turnover rent and sales performance Portfolio composition Comparable food & liquor sales growth % contribution of Wesfarmers and Woolworths to CQR ABR 10% 50% 9% 41.1% Half year sales at Dec-11= A$13.6bn 37.3% 39.5% 8% 40% 34.6% 7% 30.5% 6% 3
Slide 20: Australian Portfolio: Specialty Tenants
Australian Portfolio Specialty Tenants For personal use only Summary by Occupancy Sales Specialty occupancy cost of 8.2% % of ABR category cost1 growth1 Average specialty gross rent $719/sqm Services 7% 11.5% 4.4% Sales productivity over $8,100/sqm Food catering 7% 10.3% 3.2% Weighted average
Slide 21: Board Approved Projects
Australian Portfolio Board Approved Projects For personal use only Five year Value Year one Forecast Project unlevered Status ($m) yield Scope of works completion IRR Woolworths supermarket major refurbishment, new Preparation of Carnarvon, WA 1.0 10.7% 38.2% Jul-12 20 year lease, and carpark agreem
Slide 22: Project Pipeline
Australian Portfolio Project Pipeline For personal use only FY11 FY12 FY13 FY14 FY15 Erindale, $20.0m Mackay, $15.2m Mount Hutton, $9.0m Albany, $10.0m Carnes Hill, $4.7m Singleton, $55.6m South Hedland, $15.3m Allenstown, $16.3m Esperance, $1.6m Jerrabomberra, $2.2m Caboolture, $1.0m Carnarvon, $1.
Slide 23: Non-Core Offshore Portfolio: Poland
Non-Core Offshore Portfolio Poland For personal use only €m’s NOI performance 16.4 16.2 Occupancy steady at 97.6%1 16.1 15.9 15.8 15.5 Rental rate growth of 2.3% from 47 leasing deals 15.5 completed, increasing WALE from 2.7 years at 15.2 June 2011 to 3.3 years 14.9 14.6 Leasing services trans
Slide 24: Non-Core Offshore Portfolio: Germany
Non-Core Offshore Portfolio Germany For personal use only Occupancy at 98.1% – Chemnitz at 97.0% and Jena at 100.0% Short anchor WALE of 2.6 years Conditional agreement from Chemnitz anchor tenant, Rewe, to renew lease at a 56% reduced GLA Other major tenant lease expiry in November 2012 E
Slide 25: Financial Performance
Charter Hall Retail REIT For personal use only 04 Financial Performance
Slide 26: Earnings
Earnings Dec 2011 Dec 2011 Dec 2011 Dec 2010 For personal use only Statutory Unrealised and Operating Operating Profit Other Items Earnings Earnings A$m A$m A$m A$m Net property income from wholly owned properties 66.7 0.8 67.5 69.0 Share of profits from investment in JVs 2.6 2.0 4.6 4.4 Loss on sal
Slide 27: Balance Sheet
Balance Sheet For personal use only Dec Jun Dec Australia Poland Germany Other 2011 2011 2010 A$m A$m A$m A$m A$m A$m A$m Total assets (less cash) 1,447 254 113 44 1,858 1,891 1,884 Total debt (less cash) (435) (178) (101) (12) (726) (739) (728) Other liabilities (73) (27) (2) (1) (103) (82) (81) Ne
Slide 28: Debt Maturity Profile
Debt Maturity Profile For personal use only A$CMBS facility refinanced with substantial reduction in margin and positive earnings benefit Australian Multi-Currency facility extended to October 2016 and limit increased to $335 million Discussions on going with lender regarding non-recourse Germ
Slide 29: Strategy and Outlook
Charter Hall Retail REIT For personal use only 05 Strategy and Outlook
Slide 30: Retail Sector
Retail Sector Supermarket anchored shopping centres For personal use only Resilience of non-discretionary retail spending supported by the refurbishment and enhancement of our existing supermarket outlets The percentage of Australian ABR represented by non-discretionary tenants is 70%1 Recent
Slide 31: Strategy
Strategy For personal use only Maintain and enhance the REIT‟s non-discretionary defensive Australian portfolio through focus on: ― Enhancing anchor WALE, occupancy and property income growth via integrated property, asset and development management team structure ― Enhancing IRR performance of th
Slide 32: FY12 Outlook
FY12 Outlook For personal use only Charter Hall Retail REIT is well positioned with the majority of its portfolio consisting of high quality resilient Australian neighbourhood and sub-regional shopping centres FY12 operating earnings barring unforseen events and on execution of strategy is forecas
Slide 33: Questions
Charter Hall Retail REIT For personal use only Questions
Slide 34: Annexures
Annexures For personal use only 1 Glossary Slide 35 2 Management Team Update Slide 36 3 Detailed Earnings Slide 37 4 NTA Reconciliation Slide 38 5 Debt & Covenants Slides 39 – 40 6 Hedging Profile Slides 41 – 42 7 Capital Expenditure Slide 43 8 Non-Core Offshore Portfolio Slide 44 9 Portfolio Detail
Slide 35: Glossary
Annexure 1 Glossary For personal use only ABR: Annual base rent – base rent only, excludes outgoings and turnover rent GLA: Gross lettable area Gross rent: Base rent and outgoings MAT: Moving annual turnover – calculated as a sum of rolling 12 month sales Occupancy cost: Calculated as the
Slide 36: Management Team Update
Annexure 2 Management Team Update For personal use only Steven Sewell resigned as Chief Executive Officer of the REIT on 3 January 2012 Scott Dundas, having 14 years of experience with the REIT, will take on the Acting CEO role until a formal recruitment process is complete Richard Di Lernia,
Slide 37: Detailed Earnings
Annexure 3 Detailed Earnings For personal use only Dec 2011 Dec 2011 Dec 2011 Dec 2010 Statutory Unrealised and Operating Operating Profit Other Items Earnings Earnings A$m A$m A$m A$m Net property income 8.5 (0.2) 8.3 10.8 Management fees (0.1) - (0.1) (0.4) Finance costs (3.5) - (3.5) (5.8) Other
Slide 38: NTA Reconciliation
Annexure 4 NTA Reconciliation For personal use only +0.14 (0.04) $3.14 $3.04 AUSTRALIA NTA at 30 June 2011 Offshore disposals and Interest rate swap MtM NTA at 31 December 2011 reweighting to Australia movements $0.50 (0.14) OFFSHORE (0.02) (0.05) $0.29 NTA at 30 June 2011 Offshore disposals and Int
Slide 39: Debt Maturities
Annexure 5 Debt Maturities For personal use only Facility Drawn Drawn 31 December 2011 Region Rate Maturity CQR share CQR share CQR share (Natural m’s) (Natural m’s) (A$m) Germany EUR 81.8 81.8 103.8 Floating Jul-12 Lindbergh Crossing US 3.5 3.5 3.5 Fixed Aug-12 Total FY13 107.3 AUS JV debt – Lake M
Slide 40: Covenants
Annexure 5 Covenants For personal use only Facility Drawn Unused 31 December 2011 Maturity Financial Covenants Covenant Actual CQR share Facility Facility Australia A$m A$m A$m Security pool gearing 60.0% 39.9% Multi-Currency Facility 285.0 201.4 83.6 Oct-16 Security pool ICR 1.85x 2.60x Gearing1 65
Slide 41: Income Hedging & Cross Currency Swaps
Annexure 6 Income Hedging & Cross Currency Swaps For personal use only Income hedging 2H 12 FY13 FY14 FY15 Avg. proportion income hedged USD 100% 100% 100% 55% Avg. FX forward rate (0.76) USD 0.76 0.76 0.76 0.76 Avg. proportion income hedged EUR 16% 14% 12% 3% Avg. FX forward rate (0.56) EUR 0.56 0.
Slide 42: Interest Rate Risk Management
Annexure 6 Interest Rate Risk Management For personal use only Australia (Total debt - A$523.1m) 1H 12 FY13 FY14 FY15 FY16 Avg. hedged debt 77% 77% 75% 61% 33% Weighted average debt margin 1.9% 1.9% 1.9% 1.9% 1.9% Weighted avg. hedge rate 4.9% 4.9% 4.9% 5.0% 5.2% United States (Total debt - A$46.3m)
Slide 43: Capital Expenditure
Annexure 7 Capital Expenditure For personal use only Region (A$m, CQR Share) Maintenance Lease incentives Total Maintenance Development and Incentives Australia 1H 12 2.5 1.0 3.5 6.0 FY11 5.2 1.1 6.3 8.7 FY10 2.5 0.8 3.3 11.5 New Zealand 1H 12 - - - - FY11 0.1 - 0.1 - FY10 0.1 - 0.1 0.2 United State
Slide 44: Non-Core Offshore Portfolio
Annexure 8 Non-Core Offshore Portfolio For personal use only Wholly Regency JV – All values represent CQR share Total US New Zealand Total Owned – US US Number of properties 5 4 9 2 11 CQR ownership 100% 75% n/a 50% n/a Occupancy 91.4% 91.7% 91.5% 100.0% 92.1% Same property NOI (1.4%) (1.4%) (1.4%)
Slide 45: Australia – Anchor Tenant Lease Expiry
Annexure 9 Australia – Anchor Tenant Lease Expiry For personal use only % Base Rent Expiring 59.5% 40% 35% 30% 25% 20% 15% 10.5% 10% 8.7% 5.8% 5.2% 4.6% 5% 2.8% 1.4% 0.7% 0.8% 0% 2H 12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21+ 45
Slide 46: Australia – Specialty Tenant Lease Expiry
Annexure 9 Australia – Specialty Tenant Lease Expiry For personal use only % Base Rent Expiring 40% 35% 30% 25% 20% 16.3% 17.2% 15.0% 15% 13.4% 13.2% 10.6% 10% 6.8% 5% 3.5% 2.7% 1.3% 0% 2H 12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21+ 46
Slide 47: Europe – Lease Expiry Profile
Annexure 9 Europe – Lease Expiry Profile For personal use only Poland 25.9% 25.0% 22.8% 20.0% 15.0% 14.4% 12.5% 10.0% 7.9% 6.0% 4.0% 5.0% 3.2% 2.3% 1.0% 0.0% 2H 12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21+ Germany 60.0% 53.4% 50.0% 40.0% 30.0% 26.4% 20.0% 10.6% 10.0% 4.1% 4.3% 1.2% 0.0% 2H 12 FY
Slide 48: Further information
For personal use only Further information Scott Dundas Acting Chief Executive Officer +61 2 8295 1009 scott.dundas@charterhall.com.au Philip Schretzmeyer General Manager Finance +61 2 8295 1023 philip.schretzmeyer@charterhall.com.au Kylie Ramsden Head of Listed Investor Relations +61 2 8295 1016 kyl
Slide 49: For personal use only
For personal use only charterhall.com.au/cqr
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