Charter Hall Group · ASX:CHC
Charter Hall — Investor Presentation (May 2009)
50 slides from Charter Hall's investor presentation, May 27, 2009
Slide 1: Strategic Investment & Equity Raising
For personal use only Charter Hall Group Strategic Investment & Equity Raising 27 May 2009 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO U.S. PERSONS
Slide 2: Important Notices
Important Notices This document has been prepared by Charter Hall Funds Management Limited ("CHFML") as responsible entity for Charter Hall Property Trust and Charter Hall Limited (together, "Charter Hall Group“ or “CHC”). The document is in relation to an "Entitlement Offer" of new stapled securiti
Slide 3: Agenda
Agenda For personal use only 1. Overview 2. Details of Offer 3. Transaction Impact 4. Strategic Investments 5. Capital Management 6. Key Investment Risks 7. Summary Charter Hall Group Strategic Investment & Equity Raising 3 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO U.S. PERSONS
Slide 4: Section one: Overview
For personal use only Section one Overview 275 George Street, Brisbane Qld (Jointly owned by CHOF4 and CPOF) NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO U.S. PERSONS
Slide 5: Transaction Overview
Transaction Overview For personal use only Gandel Group (“Gandel”) to make a strategic investment of up to $82 million in Charter Hall Group (“CHC”) and its managed funds – An investment of up to $37 million in CHC, equating to a holding of up to 15% post equity raising – Agreement to acquire $30 mi
Slide 6: Transaction Overview
Transaction Overview For personal use only Investment Total CHC Investors Gandel Placement $24m - $24m Entitlement1 $49m $49m2 $13m underwrite2 Total equity raising $73m $49m $37m CPOF unit sale $30m - $30m SSF commitment $15m - $15m Total funds $118m $49m $82m NOTES: 1. Entitlement of $49 million o
Slide 7: Why Invest in CHC?
Why Invest in CHC? For personal use only High quality property platform – Property specialist with strong skills in property ownership, development and management – One of the largest Core-Plus and Opportunistic wholesale fund mangers in Australia – Proactive agile approach to current conditions – f
Slide 8: Secure Income and Long Leases
Secure Income and Long Leases For personal use only CHC Investment Portfolio Top 10 tenants (by income)1 Lease expiry profile (by income)1 9.5% Current 1.7% Bunnings FY09 (remaining) 1.9% Coles 7.2% FY10 5.3% Telstra 6.1% FY11 5.0% Westpac/St George 6.0% FY12 4.5% C'w ealth Government 3.5% FY13 5.5%
Slide 9: Gandel Group
Gandel Group For personal use only National Australia Bank introduced Gandel to CHC as a potential investor given the mutual benefits of a strategic investment1 Gandel is a diversified institutional investment group and property owner – 17% of the listed Colonial Retail Trust (ASX code: CFX) – 50% o
Slide 10: Section two: Details of the Offer
For personal use only Section two Details of the Offer Atrium, Pyrmont NSW (Owned by CPOF) NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO U.S. PERSONS
Slide 11: Offer Structure
Offer Structure For personal use only The Offer of $73 million comprises the following components: – Private placement to Gandel of $24 million at $0.33 per security – Fully underwritten accelerated non-renounceable 2 for 7 entitlement offer to raise $49 million • $13 million underwritten by Gandel1
Slide 12: Offer Metrics
Offer Metrics For personal use only Issue Price Discounts 56% Discount 15% 10% Discount Discount $0.75 $0.39 $0.37 $0.33 1 2 2,3 Pro-forma NTA 5-day VWAP TERP on last closing price Issue Price NOTES: 1. Refer to slide 31 for further detail on NTA 2. Calculated as at last close 26 May 2009 3. Theoret
Slide 13: Offer Timetable
Offer Timetable For personal use only Event1 Date Institutional Offer opens 10.30am (AEST), 27 May 2009 Institutional Offer closes 6.00pm (AEST), 27 May 2009 Institutional allocations advised and trading resumes 28 May 2009 Record Date for determining Entitlements for the Entitlement Offer 7.00pm (A
Slide 14: Section three: Transaction Impact
For personal use only Section three Transaction Impact 275 George Street, Brisbane Qld (Jointly owned by CHOF4 and CPOF) NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO U.S. PERSONS
Slide 15: Gearing
Gearing For personal use only CHC balance sheet pro-forma gearing1 reduced from 9.9% to nil – Intention to minimise gearing against co-investments going forward Look-through pro-forma gearing2 reducing to 34.1% – Managed fund debt facilities are stand alone with no recourse to, or guarantee from, CH
Slide 16: NTA
NTA For personal use only Pro-forma Net Tangible Assets per security (NTA) of $0.75 Total pro-forma Net Tangible Assets of $516 million NTA Sensitivities $0.12 $1.09 $0.97 $0.75 $0.70 $0.64 31-Dec-08 Adjustments 1 Pro-forma Pre Pro-forma Post 5% Fall in Property 10% Fall in Property Transaction Tran
Slide 17: Underlying EPS
Underlying EPS For personal use only Revised FY09 underlying EPS guidance of FY09 Underlying EPS 7.75 cps1 (pre-Transaction) – Compared with previously provided guidance of 8.0 cps Pro-forma FY09 underlying EPS reduced to 5.702 cps (post-Transaction) – Assumes full year impact of the Transaction – P
Slide 18: Section four: Strategic Investments
For personal use only Section four Strategic Investments 202 Pier Street, Perth WA (Owned by CHOF5) NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO U.S. PERSONS
Slide 19: Strategic Investments
Strategic Investments For personal use only In addition to the participation in the Offer, Gandel will also invest in the Core Plus Office Fund and the proposed Special Situations Fund Agreement to acquire $30 million of CPOF units from CHC at 20% discount to 30 June 2009 NTA1 – CHC’s holding reduce
Slide 20: Section five: Capital Management
For personal use only Section five Capital Management 400 Kent Street, Sydney NSW (Jointly owned by CHC and DPF) NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO U.S. PERSONS
Slide 21: Capital Management Initiatives
Capital Management Initiatives For personal use only Management remains committed to capital management for both CHC and the managed funds CHC Initiatives – Minimise gearing of co-investments going forward – This Transaction – Withstand further asset declines and fund future – Revised distribution p
Slide 22: CHC Capital Management
CHC Capital Management For personal use only Funding requirements CHC has the following equity commitments to managed funds: Fund Total undrawn commitments Allocated commitments1 Remaining commitments CPIF $30.0m - $30.0m CHOF4 $1.0m $1.0m - CHOF5 $27.0m $10.0m $17.0m SSF2 $15.0m - $15.0m Total $73.
Slide 23: Managed Funds Capital Management
Managed Funds Capital Management For personal use only CHC is pursuing the following capital management initiatives for the managed investment funds to achieve increased LVR headroom capacity Potential new equity Fund Renegotiate facility covenants Asset sales raising CPOF CPIF CPRF DPF The table be
Slide 24: Investment Fund Debt Summary
Investment Fund Debt Summary For personal use only As announced, CHC has re-negotiated DEBT FACILITY CHC CPOF CPRF CPIF DPF covenants and term for a number of debt Assets ($m)1 499 1,347 381 358 232 facilities in Core Plus funds Net debt drawn ($m) - 656 160 134 141 Analysis at right is based on inv
Slide 25: Debt Facility Expiries
Debt Facility Expiries For personal use only No significant maturities until 2HFY11 Pro-forma debt expiry profile by fund (based on drawn amounts)1 $600m DPF $500m CPIF $460m CPRF $421m $400m CPOF $300m $200m $133m $100m $60m $16m $0m 2HFY09 1HFY10 2HFY10 1HFY11 2HFY11 1HFY12 2HFY12 1HFY13 NOTES: 1.
Slide 26: Section six: Key Investment Risks
For personal use only Section six Key Investment Risks ONE30 Stirling Street, Perth WA (Owned by CPOF) NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO U.S. PERSONS
Slide 27: Key Investment Risks
Key Investment Risks For personal use only CHC specific risks – Investments in managed funds – Equity commitments from CHC’s co-investments in its managed funds – Debt renewals, refinancing and access to funding generally – Reliance on third party equity for funds – Change in value of properties – P
Slide 28: Section seven: Summary
For personal use only Section seven Summary 53 Berry Street, North Sydney NSW (Owned by DPF) NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO U.S. PERSONS
Slide 29: Summary
Summary For personal use only The Transaction will put CHC in a strong position – CHC’s balance sheet pro-forma gearing reduced to nil – Pro-forma look-through gearing reduced to 34%1 (no managed fund debt has recourse to investors, including CHC) – Increasing available liquidity to provide addition
Slide 30: Appendix A: Financial Detail
For personal use only Appendix A Financial Detail Hatch Building, Perth WA (Owned by CPOF) NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO U.S. PERSONS
Slide 31: Appendix A1 - CHC Balance Sheet
Appendix A1 - CHC Balance Sheet For personal use only ACTUAL ADJUSTMENTS PROFORMA PROFORMA 31 DECEMBER PRE- POST 2008 TRANSACTION TRANSACTION 1 Direct property 41.0 (41.0) 0.0 0.0 2 Indirect property investments 467.7 (12.5) 455.2 415.8 3 CIP 42.6 (15.0) 27.6 27.6 Other investments 20.6 0.0 20.6 20.
Slide 32: Appendix A2 - Debt Facility Summary
Appendix A2 - Debt Facility Summary For personal use only FACILITY ASSET DRAWN DEBT LVR HEAD VALUES ($M)1 MATURITY CURRENT LVR2 COVENANT ROOM % 3 ($M) CHC NOTES: 1. Drawn debt shown net of cash. Cash Group Facility 499 0 Jul-11 0% 25% N/A balance at fund level used to reduce CPOF various debt facili
Slide 33: Appendix A3 - CHC Investment Portfolio
Appendix A3 - CHC Investment Portfolio For personal use only Weighted average market cap rates and pro-forma equity investment balances (as at 31 March)1 CPOF $181.3m 7.12% CPIF $55.7m 7.62% CPRF $141.9m 7.47% DPF $23.4m 7.81% CHUF $52.9m 7.43% CHC $455.2m 7.36% NOTES: 1. Based on directors and inde
Slide 34: Appendix B: Key Investment Risks
For personal use only Appendix B Key Investment Risks 399 Royal Parade, Parkville Vic (Owned by CPOF) NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO U.S. PERSONS
Slide 35: Key Investment Risks
Key Investment Risks For personal use only Outline – This section summarises some of the key risks that may affect the future performance of an investment in CHC. This is not an exhaustive list of the relevant risks. If any of the following risks materialise CHC’s business, financial condition and o
Slide 36: Key Investment Risks
Key Investment Risks For personal use only General Risks affecting CHC (continued) – ASX Market Volatility: The ASX price of CHC securities will fluctuate due to various factors including general movements in interest rates, the Australian and international investment markets, international economic
Slide 37: Key Investment Risks
Key Investment Risks For personal use only Regulatory Issues and Changes in Law – Changes in Law: CHC is subject to the usual business risk that there may be changes in laws or government legislation, regulation and policy that reduce income or increase costs. This may adversely affect the future ea
Slide 38: Key Investment Risks
Key Investment Risks For personal use only Specific Risks – Investments In Managed Funds: CHC manages a number of funds on behalf of third party investors. These funds typically invest in property- related assets and use debt to partially fund their investments. Many of the debt facilities within th
Slide 39: Key Investment Risks
Key Investment Risks For personal use only Specific Risks (continued) – Illiquid Property Markets: Property assets are by their nature illiquid investments. This may make it difficult to sell assets of CHC’s in the short term in response to changes in economic or other conditions. – Change In Value
Slide 40: Key Investment Risks
Key Investment Risks For personal use only Specific Risks (continued) – Fixed Nature of Costs: Many costs associated with property assets are fixed in nature. The value of assets may be adversely affected if the income from the asset declines while these fixed costs remain unchanged. – Capital expen
Slide 41: Appendix C: Foreign Selling Restrictions
For personal use only Appendix C Foreign Selling Restrictions Sydney Wharf, Pyrmont NSW (Owned by PDP3) NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO U.S. PERSONS
Slide 42: Jurisdictions: United Kingdom
Jurisdictions For personal use only United Kingdom – This document is only intended for distribution on a confidential basis to persons who have professional experience in matters relating to investments falling within article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion
Slide 43: Jurisdictions: Singapore
Jurisdictions For personal use only Singapore This document and any other materials in connection with the Entitlement Offer relating to Singapore have not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this document and any other document or material in conne
Slide 44: Jurisdictions: Hong Kong
Jurisdictions For personal use only Hong Kong The contents of this document have not been reviewed or approved by any regulatory authority in Hong Kong. In particular, this document has not been, and will not be, registered as a 'prospectus‘ in Hong Kong under the Companies Ordinance (Cap 32) (the C
Slide 45: Jurisdictions: European Economic Area
Jurisdictions For personal use only European Economic Area This document has not been approved by the competent authority in a member state of the European Economic Area (a Member State) or, where appropriate, approved in another Member State and notified to the competent authority of any other Memb
Slide 46: Jurisdictions: Switzerland
Jurisdictions For personal use only Switzerland Neither the Securities nor the Entitlements may be publicly offered, sold or advertised, directly or indirectly, in or from Switzerland. Neither this document nor any other offering or marketing material relating to the Securities or the Entitlements c
Slide 47: Appendix D: Stock Lending and Other Transactions
For personal use only Appendix D Stock Lending and Other Transactions Bunnings Portfolio (Owned by CPRF) NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO U.S. PERSONS
Slide 48: Stock lending
Stock lending For personal use only Eligible security holders will be entitled to apply under the entitlement offer for a certain number of new securities held as at 7:00pm (AEST) on 1 June 2009 (Record Date). Notwithstanding the Record Date for the entitlement offer, CHC will be granted a waiver by
Slide 49: Further information
For personal use only Further information David Southon Joint Managing Director +61 2 8904 4053 davids@charterhall.com.au David Harrison Joint Managing Director +61 2 8904 4052 davidh@charterhall.com.au NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO U.S. PERSONS
Slide 50: For personal use only
For personal use only Sydney Melbourne Brisbane Perth Adelaide Auckland charterhall.com.au NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES OR TO U.S. PERSONS
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