Slide 1: Charter Hall Group 2018 Full Year Results
22 August 2018 Charter Hall Group 2018 Full Year Results 12 months to 30 June 2018 2 Market Street, Sydney NSW
Slide 2: Agenda
Charter Hall Group I 2018 Full Year Results 2018 Full Year Results Agenda 1. Group Highlights 2. Property Funds Management 3. Property Investment 4. Financial Result 5. Folkestone Acquisition 6. Outlook and Guidance 7. Additional Information David Harrison Sean McMahon Russell Proutt Managing Direct
Slide 3: 1. Group Highlights
Charter Hall Group I 2018 Full Year Results Our Strategy 1. Group Highlights 3 Coles, 2 Sturton Road SA
Slide 4: Group highlights
Charter Hall Group I 2018 Full Year Results Group Highlights Group highlights1 Group maintained $3.4bn of investment growth capacity Group returns Property Investments Funds Management Balance sheet 12.3% $176m operating earnings 17.0% FUM growth 0.0% balance sheet Total Property Investment $250m st
Slide 5: Our strategy
Charter Hall Group I 2018 Full Year Results Group Highlights Our strategy We use our property expertise to access, deploy, manage and invest equity in our core real estate sectors – office, retail and industrial – to create value and generate superior returns for our customers. Access Deploy Manage
Slide 6: Operational highlights
Charter Hall Group I 2018 Full Year Results Group Highlights Operational highlights Office Industrial Retail 126 42 485 LEASING DEALS EXECUTED ACROSS LEASING DEALS EXECUTED ACROSS LEASING DEALS EXECUTED ACROSS 156,000sqm 550,000sqm 81,000sqm MAJOR PRE-LEASES TO VANGUARD, SA GOVERNMENT, CBUS AND BHP
Slide 7: Sustained growth
Charter Hall Group I 2018 Full Year Results Group Highlights Sustained growth 5 year post-tax OEPS growth of 10.5% per annum Operating earnings per security growth1 Distributions per security growth 2 DPS (grossed up) Pre-tax OEPS DPS Post-tax OEPS 36.9cps 43.5cps 40.5cps 30.0cps 31.8cps 37.7cps 26.
Slide 8: 2. Property Funds Management
Charter Hall Group I 2018 Full Year Results 2. Property Funds Management 8 2 Hume Highway, Chullora NSW
Slide 9: Group Funds Management portfolio
Charter Hall Group I 2018 Full Year Results Property Funds Management Group Funds Management portfolio Portfolio Value Lettable Area No. of No. of Gross Income WALE1 Occupancy WACR2 ($bn) (m sqm) Properties Tenants ($m) (years) (%) (%) 30 Jun 18 23.2 5.4 330 2,447 1,634 7.7 98.1 5.74 30 Jun 17 19.8
Slide 10: Funds under management growth
Charter Hall Group I 2018 Full Year Results Property Funds Management Funds under management growth 5 year FUM growth of 18.6% per annum Funds under management movement ($bn) Funds under management by equity source ($bn) Wholesale Listed Retail $23.2bn $2.9bn $19.8bn $0.7bn $23.2bn $4.4bn $17.5bn $2
Slide 11: Property Investment portfolio returns
Charter Hall Group I 2018 Full Year Results Property Funds Management Property Investment portfolio returns 1 • The Property Investment Portfolios total property return over • The below chart shows the total property return of each core the five years to 30 June 2018 is 14.0% per annum, Property Inv
Slide 12: FY18 transactional activity
Charter Hall Group I 2018 Full Year Results Property Funds Management FY18 transactional activity • Consistent transaction volume across core sectors • Average acquisition value of $74m versus average divestment value of $26m Long WALE Shopping Centre ($m) Office Industrial Total Retail Retail Acqui
Slide 13: Development activity
Charter Hall Group I 2018 Full Year Results Property Funds Management Development activity Continues to drive asset creation and attract capital • Development activity is undertaken by funds and • Majority of committed projects are de-risked through partnerships to enhance income yield and total ret
Slide 14: Equity flows
Charter Hall Group I 2018 Full Year Results Property Funds Management Equity flows Diversified equity sources with $1,701m gross equity • $971m raised in Wholesale Funds and Partnerships raised in the 12 months to 30 June 2018: with further equity raising underway in CPOF and CPIF • Across the Group
Slide 15: 3. Property Investment
Charter Hall Group I 2018 Full Year Results 3. Property Investment 15 1 Shelley Street, Sydney NSW
Slide 16: Property Investment portfolio
Charter Hall Group I 2018 Full Year Results Property Investment Property Investment portfolio Portfolio Value No of WALE Occupancy WARR1 WACR WADR2 ($m) Properties (years) (%) (%) (%) (%) 30 Jun 18 1,706 298 7.2 97.9 3.6 5.80 7.1 30 Jun 17 1,527 292 7.4 97.7 3.6 6.09 7.3 Diversification by Property
Slide 17: Property Investment portfolio movement
Charter Hall Group I 2018 Full Year Results Property Investment Property Investment portfolio movement • During the 12 months to 30 June 2018 the Property • The decrease in yield has been driven by the improved Investment Portfolio increased by 11.7% (+$179m) to quality and WALE of the Portfolio, to
Slide 18: Diversified earnings resilience
Charter Hall Group I 2018 Full Year Results Property Investment Diversified earnings resilience Top 10 asset exposures represent only 15.3% of earnings • 65% repeat customers across 1,380 leases • Tenant retention rate of 77.4% in FY18 Top 10 tenants by gross income Property Investment earnings (by
Slide 19: Sustainability
Charter Hall Group I 2018 Full Year Results Property Investment Sustainability Delivering smart solutions that make a difference for our customers and the Charter Hall is part of the international Philanthropy movement planet by: Pledge 1%. Our Pledge is through: Increasing our Office portfolio NABE
Slide 20: 4. Financial Result
Charter Hall Group I 2018 Full Year Results 4. Financial Result 20 231 Elizabeth Street, Sydney NSW
Slide 21: Earnings Summary
Charter Hall Group I 2018 Full Year Results Financial Result Earnings Summary • Operating profit after tax of $175.8m, up 16.2% ($m) FY18 FY17 Change % PI operating earnings 103.9 85.0 22.2% – PI operating earnings of $103.9m, up PFM operating earnings pre-tax 98.9 85.7 15.4% 22.2% Operating earning
Slide 22: Segment result
Charter Hall Group I 2018 Full Year Results Financial Result Segment result ($m) FY18 FY17 Change % • Both PI and PFM segments contributed to Property Investment EBITDA 102.8 83.8 22.8% growth in earnings in FY18 PFM EBITDA 102.4 89.2 14.7% • PI EBITDA growth driven by: EBITDA 205.2 173.0 18.6% – Gr
Slide 23: Property funds management composition
Charter Hall Group I 2018 Full Year Results Financial Result Property funds management composition • PFM revenue up 12.6% to $201.0m ($m) FY18 FY17 Change% Fund management fees 88.0 75.0 17.4% • Investment management revenue up 9.5% to Transaction and performance fees 56.3 56.7 (0.7%) $144.3m: Inves
Slide 24: Operating cashflow
Charter Hall Group I 2018 Full Year Results Financial Result Operating cashflow • FY18 distribution covered 114% by operating cashflow • Timing of cash payment of Property Investment distributions • The cashflow variance between FY18 operating earnings and operating cashflow is primarily driven by •
Slide 25: Balance sheet and return metrics
Charter Hall Group I 2018 Full Year Results Financial Result Balance sheet and return metrics ($m) 30 June 2018 30 June 2017 • Strong balance sheet maintained: Cash 95 174 – Considerable financial flexibility with Property investment 1,706 1,527 undrawn lines and cash in hand Other assets 150 106 In
Slide 26: Debt and capital management
Charter Hall Group I 2018 Full Year Results Financial Result Debt and capital management Key debt metrics funds platform 30 June 2018 30 June 2017 • Headstock capital structure repositioned in FY18 Combined fund facility limits ($m) 10,256 8,611 – All borrowings moved to unsecured format Combined fu
Slide 27: 5. Folkestone Acquisition
Charter Hall Group I 2018 Full Year Results 5. Folkestone Acquisition 27 Only About Children, Hawthorn, VIC
Slide 28: Folkestone acquisition overview
Charter Hall Group I 2018 Full Year Results Folkestone Acquisition Folkestone acquisition overview An ASX listed diversified real estate group • Folkestone Limited (ASX: FLK) is a diversified real estate fund manager and developer, listed on the ASX on 14 June 2000 1 • Charter Hall has agreed to acq
Slide 29: FET Overview
Charter Hall Group I 2018 Full Year Results Folkestone Acquisition FET Overview FET is an ASX listed A-REIT and the largest owner of early learning properties with 410 properties Business description Key tenants (% annual rent) • FET is a specialist early learning property owner which owns 410 prope
Slide 30: Investment rationale
Charter Hall Group I 2018 Full Year Results Folkestone Acquisition Investment rationale Folkestone acquisition will provide $1.6bn of incremental FUM and accretive earnings with a new growth pathway for CHC in the early learning and social infrastructure sectors Adds $1.6bn of FUM to CHC’s funds man
Slide 31: Group Funds Management portfolio post-transaction
Charter Hall Group I 2018 Full Year Results Folkestone Acquisition Group Funds Management portfolio post-transaction Portfolio Value No. of Properties1 WALE1 Occupancy1 WACR1 ($bn) (years) (%) (%) Pre 23.2 330 7.7 98.1 5.74 Post 24.8 757 7.8 98.2 5.78 Impact +1.6 +427 +0.1 +0.1 +0.04 Diversification
Slide 32: Property Investment portfolio post-transaction
Charter Hall Group I 2018 Full Year Results Folkestone Acquisition Property Investment portfolio post-transaction PI Portfolio Value No. of Properties WALE Occupancy WARR WACR ($m) (years) (%) (%) (%) Pre 1,706 298 7.2 97.9 3.6 5.80 Post 1,791 708 7.3 98.0 3.6 5.82 Impact +85 +410 +0.1 +0.1 - +0.02
Slide 33: Timetable
Charter Hall Group I 2018 Full Year Results Folkestone Acquisition Timetable Process Date First court hearing to approve scheme booklet dispatch to Folkestone shareholders Mid September 2018 Dispatch scheme booklet to Folkestone shareholders Mid September 2018 Scheme meeting for Folkestone sharehold
Slide 34: 6. Outlook & Guidance
Charter Hall Group I 2018 Full Year Results 6. Outlook & Guidance 34 Secret Harbour Square, Secret Harbour WA
Slide 35: FY19 earnings guidance
Charter Hall Group I 2018 Full Year Results Outlook & Guidance FY19 earnings guidance We believe the property market landscape will continue to accommodate growth • Asset growth is expected in submarkets that are underpinned by favourable property fundamentals where there is effective rental growth
Slide 36: 7. Additional information
Charter Hall Group I 2018 Full Year Results 7. Additional information - Property Funds Management - Property Investment 36
Slide 37: 7.1 Property Funds Management
Charter Hall Group I 2018 Full Year Results Appendix 7.1 Property Funds Management 37 Artist impression - GPO Exchange, 2-10 Franklin Street, Adelaide SA
Slide 38: Charter Hall group property overview
Charter Hall Group I 2018 Full Year Results Appendix – Property Funds Management Charter Hall group property overview1 2 83 Properties valued at $0.1bn Properties valued at $4.7bn Office 0 Office 13 Retail 1 Retail 46 Industrial 1 Industrial 24 NT QLD 101 45 Properties valued at $9.5bn Properties va
Slide 39: Wholesale
Charter Hall Group I 2018 Full Year Results Appendix – Property Funds Management Charter Hall managed funds Office $11.0bn Industrial $6.1bn Retail $6.1bn CHOT CPOF1 BSWF1 CLP CPIF LWHP RP2 LWIPs3 Wholesale $2.9bn $4.5bn $0.6bn $1.6bn $3.0bn $1.0bn $0.1bn $0.6bn Equity CCT Mandates RP6 Mandates CPRF
Slide 40: Office
Charter Hall Group I 2018 Full Year Results Appendix – Property Funds Management Office “We create high-quality workplace environments for tenant customers and enhanced returns for our investors through actively managing, developing and acquiring assets to create one of the highest performing office
Slide 41: Industrial
Charter Hall Group I 2018 Full Year Results Appendix – Property Funds Management Industrial “As a leading industrial and logistics property group in Australia we create, own and manage a geographically diverse property portfolio that meets the strategic needs of our tenant customers while also meeti
Slide 42: Retail
Charter Hall Group I 2018 Full Year Results Appendix – Property Funds Management Retail “As the leading owner and manager of convenience based Retail and with a portfolio of supermarket anchored shopping centres, hardware, automotive showrooms and hospitality assets, we are focused on optimizing per
Slide 43: Charter Hall Direct
Charter Hall Group I 2018 Full Year Results Appendix – Property Funds Management Charter Hall Direct “Charter Hall Direct Property is Australia’s leading direct property fund manager, with $3 billion of real estate assets under management. We have a strong track record managing unlisted property fun
Slide 44: Direct funds net returns since inception
Charter Hall Group I 2018 Full Year Results Appendix – Property Funds Management Direct funds net returns since inception The active Direct Funds have returned 12.9% p.a. outperforming the benchmark1 by 1.7% 19.4% 18.1% 17.4% 13.2% 13.3% 13.3% 12.2% 12.3% 11.9% 11.8%12.0% 11.5% 12.1% 11.5% 11.6% 11.
Slide 45: 7.2 Property Investment
Charter Hall Group I 2018 Full Year Results Appendix 7.2 Property Investment 45 1 Shelley Street, Sydney NSW
Slide 46: Property Investment portfolio
Charter Hall Group I 2018 Full Year Results Appendix – Property Investment Property Investment portfolio Charter Hall Charter Hall Ownership WALE WACR WADR WARR PI Yield2 Investment PI Income Stake (%) (years) (years) (%) (%) (%) ($m) ($m) Office 620.1 34.1 5.5 5.39% 6.8% 3.8% 6.1% Charter Hall Prim
Slide 47: Charter Hall Retail REIT (ASX:CQR)
Charter Hall Group I 2018 Full Year Results Appendix – Property Investment Charter Hall Retail REIT (ASX:CQR) Key events during FY18 Key metrics Gross property assets3 $2.9bn • Acquired Salamander Bay, NSW and Highfields Village, QLD for the combined Total debt $1.1bn consideration of $215.5m and Ga
Slide 48: Charter Hall Office Trust (CHOT)
Charter Hall Group I 2018 Full Year Results Appendix – Property Investment Charter Hall Office Trust (CHOT) Key events during FY18 Key metrics Gross property assets $2.9bn • Equity return – 22.2% for 12 months to June 2018 (unit price, post final Total drawn debt $1.2bn performance fee forecast) Gea
Slide 49: Charter Hall Prime Office Fund (CPOF)
Charter Hall Group I 2018 Full Year Results Appendix – Property Investment Charter Hall Prime Office Fund (CPOF) Key events during FY18 Key metrics • The Fund returned 15.8% in the 12 months to 30 June 2018, outperforming the MSCI / Gross property assets $4.5bn IPD Unlisted Wholesale Core Office Ind
Slide 50: Charter Hall Long WALE REIT (ASX:CLW)
Charter Hall Group I 2018 Full Year Results Appendix – Property Investment Charter Hall Long WALE REIT (ASX:CLW) Key events during FY18 Key metrics Gross property assets $1.5bn • Operating 1 EPS and DPS of 26.4 cents for the period, reflecting 3.9% annual growth Total debt $0.4bn • Continue to impro
Slide 51: Core Logistics Partnership (CLP)
Charter Hall Group I 2018 Full Year Results Appendix – Property Investment Core Logistics Partnership (CLP) Key events during FY18 Key metrics Gross property assets $1.6bn • New leases over 275,700sqm of GLA were executed. These include Total debt $0.4bn 158,600sqm of leases on the Fund’s stabilised
Slide 52: Charter Hall Prime Industrial Fund (CPIF)
Charter Hall Group I 2018 Full Year Results Appendix – Property Investment Charter Hall Prime Industrial Fund (CPIF) Key events during FY18 Key metrics • Acquisition of five assets for $370m settled during the year, this includes Gross property assets $3.0bn Hastings Deering portfolio at Acacia Ridg
Slide 53: Fund key and glossary
Charter Hall Group I 2018 Full Year Results Additional information Fund key and glossary Listed entities Direct funds CHC Charter Hall Group BW Trust BW Trust (Direct syndicate) CQR Charter Hall Retail REIT CDC Charter Hall Direct CDC Trust DIF2, DIF3, DIF4 Direct Industrial Fund series CLW Charter
Slide 54: Contact information
Charter Hall Group I 2018 Full Year Results Additional information Contact information David Harrison Russell Proutt Sean McMahon Philip Cheetham Managing Director & Group CEO Chief Financial Officer Chief Investment Officer Head of Listed Investor Relations Charter Hall Group Charter Hall Group Cha
Slide 55: Disclaimer
Charter Hall Group I 2018 Full Year Results Additional information Disclaimer IMPORTANT NOTICE & DISCLAIMER This presentation has been prepared by Charter Hall Funds Management Limited ACN 082 991 786)) (together, with its related bodies corporate, the Charter Hall Group). This presentation has been
Slide 56: www.charterhall.com.au
Charter Hall Group I 2018 Full Year Results Sydney Head Office Level 20, No.1 Martin Place Sydney, NSW, 2000 T: +61 2 8651 9000 Melbourne Level 12, 570 Bourke Street Melbourne VIC 3000 T: +61 3 9903 6100 Brisbane Level 22, Northbank Plaza 69 Ann Street Brisbane QLD 4000 T: +61 7 3228 2000 Perth Leve