Charter Hall Group · ASX:CHC
Charter Hall — FY2022 Earnings Presentation
44 slides from Charter Hall's earnings presentation, Aug 25, 2022
Slide 1: 2022 Full Year Results
Charter Hall Charter Hall Long WALE REIT 2022 Full Group Year Results
Slide 2: Acknowledgement of Country
Acknowledgement 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,
Slide 3: Agenda
Agenda 1. Highlights and Strategy 2. Group Funds Management 3. Property Investment 4. Financial Result 5. Update and Guidance 6. Additional Information Cover: Southern Cross, Melbourne (CPOF) Left: 1 Shelley Street, Sydney (CPOF) Charter CharterHall HallGroup Group 2022 2022Full FullYear YearResults
Slide 4: Highlights and Strategy
CharterHall Charter 2022 HallGroup 2022Full Group FullYear YearResults Results Results 1 Highlights and Strategy Coles Distribution Centre, Perth (CLW, DIF2 & DIF3)
Slide 5: Group highlights
Highlights and Strategy Group highlights1 Group Returns Property Investments Funds Management Investment Capacity Operating earnings Property Investment portfolio Group FUM5 Group investment capacity 7 $542.8 million $2.9bn $79.9bn ↑ 52.8% $7.9bn Statutory profit 2 Property FUM ↑ $509m $911.1 millio
Slide 6: 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 7: Operating earnings per security growth
Highlights and Strategy Operating earnings per security growth Operating earnings per security growth Distributions per security growth OEPS (post-tax) cps DPS (grossed up)1 DPS (cash paid) 115.6cps 47.6cps 44.4cps 43.4cps 40.0cps 36.9cps 40.1cps 37.9cps 35.7cps 69.3cps 33.7cps 31.8cps 61.0cps 30.0c
Slide 8: Group Funds Management
2 Group Funds Management Light Horse Business Hub, Eastern Creek (CPIF) CharterHall Charter HallGroup Group 2022 2022Full FullYear YearResults Results Results
Slide 9: Funds Under Management (FUM) growth
Group Funds Management Funds Under Management (FUM) growth Property FUM growth of 25.5% from $52.3bn to $65.6bn Group FUM growth ($bn) Property FUM by equity source ($bn) Group FUM 5-Year Property FUM CAGR $79.9bn Wholesale 26.4% PIM Listed 26.7% Partnership $65.6bn Retail 30.4% $14.3bn $2.7bn $10.5
Slide 10: 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 (Unlisted) Equity Listed Equities $11.0bn Wholesale (Unlisted) Equity $14.7bn Industrial & Logistics 13.7% $55.4bn 18.4% $21.2bn 69.4% 26.6% S
Slide 11: Property funds management portfolio
Group Funds Management Property funds management portfolio Largest diversified property portfolio in Australia Portfolio value Lettable area No. of Net rent WALE Occupancy WACR Property FUM ($bn) (m sqm) Properties ($m) (years) (%) (%) 30 June 2022 65.6 10.8 1,548 2,840 8.6 98.0 4.37 30 June 2021 52
Slide 12: Diversified tenant customers
Group Funds Management Diversified tenant customers The top 20 tenants are represented by Government, multinationals & listed companies – The top 20 tenants represent 57% of property platform income – 23% of platform leases are NNN – 21% of platform net income is CPI-linked Top 20 platform tenants b
Slide 13: FY22 property transaction activity
Group Funds Management FY22 property transaction activity $8.5bn of transaction activity, comprising over 90 transactions with 22 active funds/partnerships Social Industrial & Long WALE Shopping Office Infrastructure / Total Logistics Retail Centre Retail Other Acquisitions ($bn) 2.5 2.1 1.9 0.4 0.1
Slide 14: Development to drive deployment and FUM growth
Group Funds Management Development to drive deployment and FUM growth Development pipeline increased by $7.2bn since FY21 to $16.0bn – 88% of Industrial committed projects are pre-leased – 71% Office committed projects are pre-leased Completion value($m) Completions Committed Uncommitted Total (last
Slide 15: Equity inflows
Group Funds Management Equity inflows1 ($m) FY19 FY20 FY21 FY22 - Diverse sources of equity across Wholesale, Listed and Direct, with all areas contributing Wholesale pooled funds 1,802 1,272 2,111 1,575 during FY22 - Over 45,000 investors across FUM platform Wholesale partnerships 219 1,298 1,448 1
Slide 16: Property Investment
CharterHall Charter 2022 HallGroup 2022Full Group FullYear YearResults Results Results 3 Property Investment GPO Exchange, 2-10 Franklin Street, Adelaide (CPOF)
Slide 17: Property Investment portfolio
Property Investment Property Investment portfolio Property Investment portfolio increased by 21.1% to $2.9bn driven by valuation growth and deployment of retained earnings Portfolio Value No. of WALE Occupancy WARR WACR WADR ($bn) Properties (years) (%) (%) (%) (%) 30 June 2022 2.9 1,462 8.2 97.3 3.
Slide 18: Property Investment portfolio movement
Property Investment Property Investment portfolio movement Investment portfolio 5 year CAGR of 13.8% p.a. Property Investment portfolio movement Property Investment portfolio yield – 5.6% 10.0% $2,918m $153m $356m 8.0% $2,918m $2,409m $2,409m $2,028m 6.0% $1,844m $1,706m $1,527m 4.0% 2.0% - Jun-21 C
Slide 19: Diversified Property Investment earnings
Property Investment Diversified Property Investment earnings Property Investment portfolio provides growth and resilience given quality and strong tenant customer composition – 3.5% fixed reviews with 20% of CHPT net income CPI-linked – 71% repeat and 32% multi-sector customers across 2,737 leases –
Slide 20: ESG Leadership
Property Investment ESG Leadership Achievements in FY22 Partnering with tenant and investor customers to deliver meaningful change $2.5bn in sustainable finance 54% 1 reduction in absolute Customer partnerships Climate action transactions emissions 2 against FY17 baseline The Group now has 47MW of s
Slide 21: ESG Leadership
Property Investment ESG Leadership Achievements in FY22 Partnering with tenant and investor customers to deliver meaningful change Health and Wellbeing Employer of Choice Engagement Social Winner of HR Awards 2021 Awarded the WGEA Employer of Global high performing level of Strong communities Best H
Slide 22: Financial Result
CharterHall Charter 2022 HallGroup 2022Full Group FullYear YearResults Results Results 4 Financial Result Australian Red Cross, Sydney (CLW) 22
Slide 23: Earnings summary
Financial Result Earnings summary ($m) FY21 FY22 Change % PI EBITDA 123.0 142.9 16.2% DI EBITDA 34.2 35.5 3.8% - PI EBITDA increased by 16.2%, as a result of FM EBITDA 1 204.4 552.2 170.1% increased investment activity EBITDA 361.6 730.5 102.0% - FM EBITDA growth of 170.1% to $552.2m Depreciation (7
Slide 24: Funds management
Financial Result Funds management ($m) FY21 FY22 Change % Fund management revenue 187.8 255.2 35.9% Transaction and performance revenue 66.8 372.0 456.9% - Funds management revenue growth of 35.9% 254.6 627.2 146.3% Investment management revenue outpaces Total FM expense growth, driven by continued
Slide 25: Funds management
Financial Result Funds management Margin expansion achieved through platform scale FM EBITDA margins, FY17-FY22 FM revenue & expense trend, FY17-FY22 90.0% (%) ($m) 800 80.0% 78.5% 5-Year CAGR 700 Fund management revenue 27.7% 70.0% Property services revenue 10.1% 600 Transaction and performance rev
Slide 26: Balance sheet and return metrics
Financial Result Balance sheet ($m) 30 Jun 2021 30 Jun 2022 and return metrics Cash Property investment 344 2,409 595 2,918 Development investment 76 78 - Available cash of $595 million Receivables 107 110 Other assets1 16 308 - Other assets include PIM partnership Intangibles 115 114 - Balance shee
Slide 27: Platform capital profile and gearing
Financial Result Platform capital profile Funds platform debt metrics1 30 Jun 2021 30 June 2022 Total facility limits ($m) 20,089 25,089 - $7.9bn of available liquidity plus committed Total undrawn debt ($m) 5,043 6,605 and uncalled equity Total cash ($m) 1,634 1,338 - $15.6bn of new and refinanced
Slide 28: Update and Guidance
5 HallGroup Group 2021 Full Year Results 2022 Half Year Results Update and Guidance Brisbane City Council Bus Network Terminal, Brisbane (CQE & CLW) Charter CharterHall Charter Hall Group 2022 Full Year Results
Slide 29: FY23 – Year to date activity
Update and Guidance FY23 – Year to date activity $3.5bn of net transactions since 30 June 2022 Year to date activity Property FUM by Sector $0.4bn $0.4bn $0.1bn $69.1bn Listed Equities $1.0bn $0.4bn Long WALE Retail 0.5% $10.1bn $1.6bn 14.6% Industrial & Logistics $22.4bn Social Infrastructure 32.4%
Slide 30: FY23 operating earnings guidance
Update and Guidance FY23 operating earnings guidance Based on no material adverse change in current market conditions, FY23 guidance is for post-tax operating earnings per security of no less than 90 cents. FY23 distribution per security guidance is for 6% growth over FY22. Wesley Place, 130 Lonsdal
Slide 31: Additional Information
CharterHall Charter 2022 HallGroup 2022Full Group FullYear YearResults Results Results 6 Additional Information Charter Hall Offices, 1 Martin Place, Sydney (CHOT)
Slide 32: Management bench experience
Additional Information Management bench experience Charter Hall Executive Committee (EXCO) David Harrison Managing Director & Group CEO 35 years industry experience Sean McMahon Russell Proutt Carmel Hourigan Richard Stacker Natalie Devlin Ben Ellis Steven Bennett Sheridan Ware Chief Investment Chie
Slide 33: Property Platform
Additional Information Charter Hall Group Property Platform1 0.1bn $ $ 11.6bn $ 4.4bn 3.2bn $ 27.3bn $ 0.4bn $ 17.4bn $ $0.6bn Charter Hall Group 1. Excludes Maxim and other smaller investments 2022 Full Year Results 33
Slide 34: Charter Hall managed funds
Additional Information Charter Hall managed funds Industrial Social SC Listed Long WALE Retail Office & Logistics Infrastructure Retail Equities $21.2bn $9.9bn $26.0bn $3.7bn $4.4bn $14.7bn Wholesale 1 4 6 7 9 Australian CPIF CLP LWHP LWIPs LEP CPOF CHOT BSWF CHET CPRF (Unlisted) Equities Equity $11
Slide 35: Wholesale pooled and partnerships property funds
Additional Information Wholesale pooled and partnerships property funds FUM Gearing $ 41.6bn 25.8% Occupancy WALE 97.2% 8.0yrs Cap rate CHC investment 4.2% $ 1.6bn Midwest Logistics Hub, Truganina, Melbourne (CPIF) Charter Hall Group 2022 Full 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 20.5% 17.4% 16.7% 15.7% 15.1% 15.4% 15.4% 11.5% 10.5% 10.5% 7.6% 7.6% CHOT CPOF CPIF CLP LWHP LWIP 2017 to 2022 2017 to 2022 2017 to 2022 2017 to 2022 2017 to 2022
Slide 37: Listed
Additional Information Listed FUM Gearing $ 13.5bn 27.7% Occupancy WALE 99.3% 10.5yrs Cap rate CHC investment1 4.7% $ 0.9bn Arnotts, Huntingwood Distribution Facility, Huntingwood (CPIF & CLW) 1. Held at accounting value not market value Charter Hall Group 2022 Full Year Results 37
Slide 38: Charter Hall Direct
Additional Information Charter Hall Direct FUM Gearing $ 10.5bn 30.5% Occupancy WALE 98.8% 8.2yrs Cap rate CHC investment 4.6% $ 0.5bn 6 Hassall Street, Parramatta (DOF) Charter Hall Group 2022 Full Year Results 38
Slide 39: Direct funds have returned an average of 14.6% p.a. since inception
Additional Information Direct funds have returned an average of 14.6% p.a. since inception Outperforming their respective MSCI/IPD indices1 by over 1.8x 25.0% 20.4% 20.0% 18.4% 16.0% 15.9% 14.8% 15.0% 12.6% 11.2% 11.5% 10.8% 10.0% 9.5% 8.9% 8.9% 8.9% 8.8% 7.3% 7.5% 7.1% 6.8% 5.0% 0.0% DOF 3 PFA3 DIF
Slide 40: 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) 1.4 120.3 4.8 10.7 3.8 5.4 3.2 4.1 Charter Ha
Slide 41: Statutory balance sheet reconciliation
Additional Information Statutory balance sheet reconciliation Adj. 1: Adj 2: Investor Presentation ($m) Statutory Balance Sheet Reclassify WPS2 as Equity Reclassify mark-to-market on (slide 26) Accounted investment derivatives Cash 595 - - 595 Property Investment 2,882 36 - 2,918 Development Investm
Slide 42: Portfolio performance review testing FY23 – FY28
Additional Information Portfolio performance review testing FY23 – FY28 Fund Testing frequency Charter Hall Direct Industrial Fund No. 2 (DIF2) FY23 Core Logistics Partnership (CLP) FY23, FY27 plus individual asset divestments Charter Hall Direct Long WALE Fund (LWF) 5 yearly – FY23, FY28, etc FY23
Slide 43: 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 44: 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