Charter Hall Group · ASX:CHC
Charter Hall — Merger or Acquisition (June 2007)
26 slides from Charter Hall's merger presentation, Jun 5, 2007
Slide 1: Charter Hall Group Strategic Acquisitions
CHARTER HALL GROUP Strategic Acquisitions Commercial & Industrial Property (CIP) Portfolio of retail properties 5 JUNE 2007 1 NO DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 2: Disclaimer
Disclaimer This is not a prospectus or product disclosure statement. This Presentation has been prepared by Charter Hall Limited and Charter Hall Funds Management Limited as responsible entity of Charter Hall Property Trust (collectively ‘CHC’) This presentation and its contents have been distribute
Slide 3: Agenda
1. Executive Summary 2. CIP 3. Acquisition Assets 4. Key Financial Impact 5. Offer Details 6. Recap of Investment Case 3 NO DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 4: 1. Executive Summary
1. Executive Summary ¾ Charter Hall is pleased to announce the acquisition of: ¾ A 50% interest in Commercial & Industrial Property (CIP), a private industrial development group ¾ Prime portfolio of 6 Bunnings Warehouses and a neighbourhood shopping centre to seed its Core Plus Retail Fund (CPRF) ¾
Slide 5: Agenda
1. Executive Summary 2. CIP 3. Acquisition Assets 4. Key Financial Impact 5. Offer Details 6. Recap of Investment Case 5 NO DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 6: 2. CIP Acquisition
2. CIP Acquisition ¾ Charter Hall has agreed to acquire a 50% stake in CIP ¾ Consideration of $40 million representing a 4.76x FY07 profit before tax multiple ¾ Incentive payments payable at end of FY09 capped at $30 million ¾ Charter Hall has an option to acquire the remaining 50% of CIP in FY10 ¾
Slide 7: 2. Consideration Package
2. Consideration Package ¾ The offer package for CIP has been structured to align the interests of CIP shareholders with Charter Hall ¾ $40 million upfront ($25 million cash and $15 million in Charter Hall scrip) ¾ Scrip consideration escrowed for up to three years ¾ Additional maximum $30 million i
Slide 8: 2. CIP Overview
2. CIP Overview ¾ A national private industrial development group focused on: Vendors CHC ¾ Distribution/warehouse centres Management and co-investment 50% 50% ¾ Commercial business parks ¾ Integrated business covering all aspects of the design and development process CIP JV partner Relationship ¾ C
Slide 9: 2. CIP Overview
2. CIP Overview ¾ Charter Hall has developed a strong relationship with CIP’s senior management and has recently acquired a number of properties from CIP and its joint venture partners for CPIF ¾ These properties include: Caterpillar and Primus, Melbourne Airport, VIC Toll Priority, Viola Place, Bri
Slide 10: 2. Other CIP Sample Developments
2. Other CIP Sample Developments Star Track Express, Melbourne Airport, VIC Fosters, Rosehill, NSW Completed in 2003 and 2005 with an approximate value of $13.7m Completed in 2007 with an approximate value of $55.0m Developed in joint venture with Australand Developed for Multiplex Acquired by Austr
Slide 11: 2. CIP Management
2. CIP Management ¾ CIP was formed in 2003 by the merger of the Santilli Group CIP Staff Title Sector yrs experience and Paul McKenna’s team Paul McKenna Managing Director 25 ¾ Group now employs 40 staff Dennis Santilli Chairman 25 ¾ Offices located in Sydney and Melbourne Robert Santilli Director 2
Slide 12: 2. CIP's Senior Management Team
2. CIP’s Senior Management Team Managing Director: Paul McKenna Chairman: Dennis Santilli Paul is the founder of CIP with more than 25 years Dennis is co-founder of CIP and has more than 25 years development and building industry experience. He experience in property and is responsible for acquiring
Slide 13: Agenda
1. Executive Summary 2. CIP 3. Acquisition Assets 4. Key Financial Impact 5. Offer Details 6. Recap of Investment Case 13 NO DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 14: 3. Acquisition Assets
3. Acquisition Assets ¾ Charter Hall has agreed to acquire assets totalling $197 million to increase the seed portfolio for Core Plus Retail Fund (CPRF) to over $438 million ¾ CPRF equity raising expected to close in FY08 ¾ Assets comprise a portfolio of Bunnings Warehouses and a neighbourhood shopp
Slide 15: 3. Acquisition Assets: Bunnings Portfolio
3. Acquisition Assets Bunnings Portfolio ¾ Portfolio of six prime bulky retail assets located in NSW, QLD, VIC and ACT ¾ Acquired for $130 million on an initial yield of 6.2% ¾ Total net lettable area of 76,209 m2 or average asset net lettable area of 12,700 m2 ¾ Annual rent increases of 3% during i
Slide 16: 3. Acquisition Assets
3. Acquisition Assets a~êïáå Stafford, QLD $20.65 million $26.50 million Penrith, NSW _êáëÄ~åÉ mÉêíÜ póÇåÉó ^ÇÉä~áÇÉ `~åÄÉêê~ jÉäÄçìêåÉ Nowra, NSW $13.70 million Nerang, QLD $19.00 million eçÄ~êí Belconnen, ACT $23.85 million Box Hill, VIC $26.30 million 16 NO DISTRIBUTION OR RELEASE IN THE UNITED S
Slide 17: 3. Acquisition Assets: Bluewater Plaza Shopping Centre
3. Acquisition Assets Artist Impression Bluewater Plaza Shopping Centre ¾ Located in Redcliffe, a bayside suburb of greater Brisbane, approximately 24 km northeast of Brisbane CBD ¾ Acquired for $67 million on an initial yield of 6.25% ¾ Total lettable area of 11,454 m2 ¾ An enclosed neighbourhood s
Slide 18: Core Plus Retail Fund Seed Assets Overview
3. Acquisition Assets Artist Impression Core Plus Retail Fund Seed Assets Overview Tenant Split Sector Split Geographic Diversification WA 1.4% Specialty 22.9% QLD Bulky 27.7% 30.2% VIC 39.2% NZ Retail 9.1% 69.8% Anchor 77.1% ACT NSW 5.3% 17.3% Asset Diversification Lease Expiry Menai Harvey Norman,
Slide 19: 3. Acquisition Assets
3. Acquisition Assets CHARTER HALL GROUP (CHC) 15% 3% 20% 20% 20% 100% 0-20% 0-20% CHOF 5 CHOF 4 CPOF CPIF CPRF CHPT DPF CHUF $ 1bn $500m $734m → $1,250m $248m → $700m >$438m → $1bn $109m → $547m $108m $100m Nortbank Plaza, Nortbank Plaza, Coles Myer Distribution Home HQ, Home HQ, Coles Myer Distrib
Slide 20: Agenda
1. Executive Summary 2. CIP 3. Acquisition Assets 4. Key Financial Impact 5. Offer Details 6. Recap of Investment Case 20 NO DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 21: 4. Key Financial Impact
4. Key Financial Impact ¾ Acquisition is accretive to FY07 consensus1 DPS forecasts of 9.93 cpu on a proforma basis by approximately 10%2 ¾ CIP acquisition accretive of over 9% ¾ Retail assets slightly accretive (assumes the retail assets are held on Balance Sheet for full year) ¾ Increase in market
Slide 22: 4. Key Financial Impact
4. Key Financial Impact FY07 Revenue Pre FY07 Revenue Post (Proforma) CIP 9% Funds Management 33% Funds Management 45% Property Investment 55% Property Investment 58% Current Investment Pre Current Investment Post DPF CHOF 4 DPF CIP 1% 1% CHUF 1% 5% CHUF CHOF 4 CHOF 5 1% 0.4% 2% 5% CHOF 5 3% CPOF CP
Slide 23: Agenda
1. Executive Summary 2. CIP 3. Acquisition Assets 4. Key Financial Impact 5. Offer Details 6. Recap of Investment Case 23 NO DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 24: 5. Offer Details
5. Offer Details ¾ CHC to raise a minimum of $120 million via a placement ¾ Price to be determined by a bookbuild with underwritten floor price of $2.70 ¾ Offer is underwritten by Macquarie Equity Capital Markets Limited ¾ Further, eligible Charter Hall securityholders will have the ability to parti
Slide 25: Agenda
1. Executive Summary 2. CIP 3. Acquisition Assets 4. Key Financial Impact 5. Offer Details 6. Recap of Investment Case 25 NO DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 26: 6. Recap of Investment Case
6. Recap of Investment Case ¾ Strategic acquisitions provide platform for Charter Hall’s next stage of growth ¾ Acquisition of 50% interest in CIP ¾ Establishes Charter Hall’s industrial development capabilities ¾ Complements Charter Hall’s vertically integrated business model ¾ Provides strong “off
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