Charter Hall Group · ASX:CHC
Charter Hall — H1 FY2017 Earnings Presentation
53 slides from Charter Hall's earnings presentation, Feb 24, 2017
Slide 1: 2017 Half Year Results
24 February 2017 Charter Hall Group For personal use only 2017 Half Year Results 6 months to 31 December 2016 Artist impression of 333 George Street, Sydney, NSW
Slide 2: Agenda
Charter Hall | Charter Hall Group Half Year Results I 24 February 2017 Agenda For personal use only 1. Group Highlights 2. Property Funds Management 3. Property Investment 4. Financial Result 5. Outlook and Guidance 6. Additional Information David Harrison Sean McMahon Phil Schretzmeyer Managing Dir
Slide 3: Group Highlights
Charter Hall | Charter Hall Group Half Year Results I 24 February 2017 Group Highlights For personal use only 1 Shelley Street, Sydney, NSW
Slide 4: Group Highlights
Charter Hall | Charter Hall Group Half Year Results I 24 February 2017 Group Highlights For personal use only Group Returns Property Investments Funds Management Balance Sheet 20.8% statutory profit 16.4% 8.6% FUM growth 0% balance sheet growth pcp Total Property Return2 to $19.0bn gearing4 30.7% OE
Slide 5: Our Strategy
Charter Hall | Charter Hall Group Half Year Results I 24 February 2017 Our Strategy We use our property expertise to access, deploy, manage and invest equity in our core real estate sectors – For personal use only office, retail and industrial – to create value and generate superior returns for our
Slide 6: Sustained Growth
Charter Hall | Charter Hall Group Half Year Results I 24 February 2017 Sustained Growth For personal use only Operating earnings per security growth1 Distributions per security growth 19.6 14.4 13.3 12.1 15.0 11.0 13.7 9.8 12.4 9.1 11.3 10.8 8.0 9.8 7.7 6.2 1H FY10 1H FY11 1H FY12 1H FY13 1H FY14 1H
Slide 7: Property Funds Management
Charter Hall | Charter Hall Group Half Year Results I 24 February 2017 Property Funds Management For personal use only Target, Drystone Industrial Estate, 441 Doherty Road, Truganina, VIC
Slide 8: Group Funds Management Portfolio
Charter Hall | Charter Hall Group Half Year Results I 24 February 2017 Group Funds Management Portfolio For personal use only Portfolio Portfolio No. of No. of Gross WALE1 Occupancy WACR2 Value ($bn) Size (m sqm) Properties Tenants Income ($m) (years) (%) (%) 31 Dec 16 19.0 4.9 314 2,644 1,402 7.9 9
Slide 9: FUM Growth
Charter Hall | Charter Hall Group Half Year Results I 24 February 2017 FUM Growth For personal use only Funds under management movement ($bn) Funds under management by equity source ($bn) $2.1bn ($1.7bn) $19.0bn $17.5bn $2.5bn $0.3bn $19.0bn $2.5bn $0.8bn $4.0bn $13.6bn $2.5bn $1.9bn $11.5bn $12.5bn
Slide 10: Property Transactions
Charter Hall | Charter Hall Group Half Year Results I 24 February 2017 Property Transactions For personal use only Office Industrial Retail TOTAL Acquisitions ($m) $501 $999 $664 $2,164 Divestments ($m) $541 $727 $408 $1,676 Net transactions ($m) ($40) $272 $256 $488 Gross transactions ($m) $1,042 $
Slide 11: Development Activity Enhances Fund Performance
Charter Hall | Charter Hall Group Half Year Results I 24 February 2017 Development Activity Enhances Fund Performance For personal use only • All development activity is undertaken by Funds/Partnerships to enhance income yield and total returns for managed funds • In-house development skills are a c
Slide 12: Development Projects
Charter Hall | Charter Hall Group Half Year Results I 24 February 2017 Development Projects For personal use only 2017 2018 2019 2020 333 George St, Sydney, 1PSQ, WSU 900 Ann Street, Raine Square, Perth, GPO, Adelaide, SA 11BCR, Newstead, 130 Lonsdale St, NSW Parramatta, NSW Brisbane, QLD WA QLD Mel
Slide 13: Equity Flows
Charter Hall | Charter Hall Group Half Year Results I 24 February 2017 Equity Flows For personal use only Diversified equity sources with $1,284 million gross equity raised in the 6 months to 31 December 2016 including: • $701 million in Listed Funds including $692 million from the successful IPO of
Slide 14: Property Investment
Charter Hall | Charter Hall Group Half Year Results I 24 February 2017 Property Investment For personal use only ATO Adelaide Building, SA
Slide 15: Property Investment Portfolio
Charter Hall | Charter Hall Group Half Year Results I 24 February 2017 Property Investment Portfolio For personal use only Portfolio No. of WALE1 Occupancy WARR2 WACR3 WADR4 Value ($m) Properties (years) (%) (%) (%) (%) 31 Dec 16 1,303 276 7.5 97.9 3.6 6.17 7.5 30 Jun 16 1,098 258 8.8 98.6 3.4 6.46
Slide 16: Property Investment Portfolio Movement
Charter Hall | Charter Hall Group Half Year Results I 24 February 2017 Property Investment Portfolio Movement • During the 6 months to 31 December 2016 the Property Investment Portfolio increased by 19% (+$205m) to $1,303m comprising: For personal use only $115m of net investments $90m of net re
Slide 17: Property Investment Portfolio Returns
Charter Hall | Charter Hall Group Half Year Results I 24 February 2017 Property Investment Portfolio Returns For personal use only • The Property Investment Portfolios total property return1 over the five years to 31 December 2016 is 17.5% per annum, outperforming the MSCI/IPD Unlisted Wholesale Pro
Slide 18: Major Cross Sector Tenant Customer Relationships
Charter Hall | Charter Hall Group Half Year Results I 24 February 2017 Major Cross Sector Tenant Customer Relationships For personal use only Overview of Wesfarmers Subsidiary Leases Existing Tenants Sector Area Tenancies (NLA ‘000’s m2) (#) Retail 476 100 Industrial 281 5 Office 42 4 Total 799 109
Slide 19: Major Cross Sector Tenant Customer Relationships
Charter Hall | Charter Hall Group Half Year Results I 24 February 2017 Major Cross Sector Tenant Customer Relationships For personal use only Overview of Woolworths Group Subsidiary Leases Existing Tenants Sector Area Tenancies (NLA ‘000’s m ) 2 (#) Retail 380 129 Industrial 190 7 Total 570 136 % of
Slide 20: Sustainability
Charter Hall | Charter Hall Group Half Year Results I 24 February 2017 Sustainability For personal use only Charter Hall have joined international philanthropy movement Pledge 1%. Our Pledge is through Our People: Our Places: Our Partnerships • 183 buildings across the portfolio are currently regist
Slide 21: Financial Result
Charter Hall | Charter Hall Group Half Year Results I 24 February 2017 Financial Result For personal use only Carnes Hill Marketplace, Carnes Hills, NSW
Slide 22: Profit and Loss
Charter Hall | Charter Hall Group Half Year Results I 24 February 2017 Profit and Loss For personal use only $m 1H FY17 1H FY16 Change % • 20.8% growth in Statutory Earnings to $173.3m Property investment 41.3 37.6 9.8% Property funds management (incl Corporate) 50.1 23.6 112.3% • 32.0% growth in Op
Slide 23: Segment Result
Charter Hall | Charter Hall Group Half Year Results I 24 February 2017 Segment Result For personal use only • Property funds management earnings increased by $m 1H FY17 1H FY16 Change % 67.4% driven by: PFM revenue 93.7 64.9 44.4% Strong transactional revenue PFM expenses (32.9) (30.9) 6.5% 19.6
Slide 24: Cashflow
Charter Hall | Charter Hall Group Half Year Results I 24 February 2017 Cashflow • 1H17 Distribution covered 107% by operating cashflow For personal use only • DRP has been suspended based on current liquidity position • Working capital movement driven by timing of fees and payment of expenses in the
Slide 25: Balance Sheet
Charter Hall | Charter Hall Group Half Year Results I 24 February 2017 Balance Sheet For personal use only $m 31 December 2016 30 June 2016 Change % Cash 43 145 (70.3%) • Strong balance sheet maintained: Property investments 1,303 1,098 18.7% Cash position of $43m and nil debt Other assets 128 108
Slide 26: Debt and Capital Management
Charter Hall | Charter Hall Group Half Year Results I 24 February 2017 Debt and Capital Management For personal use only • Substantial funding capacity available across the funds platform Key debt metrics Dec 16 Jun 16 Funds management debt platform ($m) 7,958 7,527 $8.0bn of debt facilities acros
Slide 27: Outlook & Guidance
Charter Hall | Charter Hall Group Half Year Results I 24 February 2017 Outlook & Guidance For personal use only 2 Market Street, Sydney, NSW
Slide 28: Upgrade to FY17 Earnings Guidance
Charter Hall | Charter Hall Group Half Year Results I 24 February 2017 Upgrade to FY17 Earnings Guidance For personal use only We believe the property market landscape will continue to accommodate growth • Relative attractiveness of commercial property • Continued equity flows expected for instituti
Slide 29: Additional Information
Charter Hall | Charter Hall Group Half Year Results I 24 February 2017 Additional Information For personal use only 1. Property Funds Management 2. Property Investment 3. Financial Result Artist’s impression, WSU, Parramatta, NSW
Slide 30: Appendix – Property Funds Management
Charter Hall | Charter Hall Group Half Year Results I 24 February 2017 Appendix – Property Funds Management For personal use only No. 1 Martin Place, Sydney, NSW
Slide 31: Charter Hall Group Property Overview
Charter Hall | Charter Hall Group Half Year Results I 24 February 2017 Charter Hall Group Property Overview For personal use only 2 75 Properties valued at $0.1bn Properties valued at $3.6bn Office 0 Office 9 Retail 1 Retail 46 Industrial 1 Industrial 20 NT QLD 95 43 Properties valued at $7.3bn Prop
Slide 32: Charter Hall Managed Funds
Charter Hall | Charter Hall Group Half Year Results I 24 February 2017 Charter Hall Managed Funds For personal use only Office $8.8bn Industrial $4.8bn Retail $5.4bn CHOT CPOF1 BSWF1 CLP CPIF LWHP RP2 LWIPs3 $2.6bn $3.0bn $0.7bn $1.4bn $2.0bn $0.7bn $0.1bn $0.5bn Wholesale Equity 75 CHOF 5 Mandates
Slide 33: Office
Charter Hall | Charter Hall Group Half Year Results I 24 February 2017 Office For personal use only “As one of the largest managers of CBD office properties in Australia, our strategy to actively manage our portfolio is creating enhanced value for investors through the successful re-development of e
Slide 34: Industrial
Charter Hall | Charter Hall Group Half Year Results I 24 February 2017 Industrial For personal use only “As one of Australia’s leading managers and developers of industrial and logistics real estate our focus is on owning and managing a geographically diverse portfolio of properties with strong tena
Slide 35: Retail
Charter Hall | Charter Hall Group Half Year Results I 24 February 2017 Retail For personal use only “As the leading owner and manager of Australian supermarket anchored shopping centres and with a portfolio of hardware, automotive showroom and hospitality assets, we are providing a secure and growin
Slide 36: Charter Hall DIRECT
Charter Hall | Charter Hall Group Half Year Results I 24 February 2017 Charter Hall DIRECT For personal use only “Charter Hall Direct is Australia’s leading manager of unlisted property funds and syndicates for retail investors including high net worth, self managed super funds and mum and dad inves
Slide 37: Direct Funds Net Returns
Charter Hall | Charter Hall Group Half Year Results I 24 February 2017 Direct Funds Net Returns For personal use only • Charter Hall Direct Syndicates & Funds have an average return of 14.0% p.a. over 18 years. Outperforming the MSCI/IPD Unlisted Core Wholesale Property Funds Index by an average of
Slide 38: Appendix – Property Investment
Charter Hall | Charter Hall Group Half Year Results I 24 February 2017 Appendix – Property Investment For personal use only Truganina Distribution Facility, VIC
Slide 39: Property Investment Portfolio 2
Charter Hall | Charter Hall Group Half Year Results I 24 February 2017 Property Investment Portfolio 1 2 For personal use only Ownership Charter Hall Charter Hall WALE WACR (%) WADR (%) WARR (%) PI Yield (%) Stake (%) Investment Investment (years) ($m) Income ($m) Office 403.7 12.2 5.5 5.84% 7.2% 3.
Slide 40: Charter Hall Retail REIT (CQR)
Charter Hall | Charter Hall Group Half Year Results I 24 February 2017 Charter Hall Retail REIT (CQR) For personal use only Key events during 1H FY17 Portfolio characteristics Key metrics • Acquired Arana Hills Plaza, QLD for $67.1m Gross property assets $2.7bn • Disposal of non-core assets for $72.
Slide 41: Charter Hall Office Trust (CHOT)
Charter Hall | Charter Hall Group Half Year Results I 24 February 2017 Charter Hall Office Trust (CHOT) For personal use only Key events during 1H FY17 Portfolio characteristics Key metrics • The Fund divested of 5 Queens Road, St Kilda and exchanged on Avaya Gross property assets $2.6bn House, Macq
Slide 42: Core Plus Office Fund (CPOF)
Charter Hall | Charter Hall Group Half Year Results I 24 February 2017 Core Plus Office Fund (CPOF) For personal use only Key events during 1H FY17 Portfolio characteristics Key metrics • The Fund achieved a 16.5% return for the 12 months to December 2016 being the Gross property assets1 $3.0bn high
Slide 43: Charter Hall Long WALE REIT (CLW)
Charter Hall | Charter Hall Group Half Year Results I 24 February 2017 Charter Hall Long WALE REIT (CLW) For personal use only Key events during 1H FY17 Portfolio characteristics Key metrics • Successful listing on the ASX on 8 November 2016 Property valuations2 $1.3bn • Acquired a portfolio in Dec
Slide 44: Core Logistics Partnership (CLP)
Charter Hall | Charter Hall Group Half Year Results I 24 February 2017 Core Logistics Partnership (CLP) For personal use only Key events during 1H FY17 Portfolio characteristics Key metrics • CLP divested five assets for a combined realisation of $233m in 1H FY17 Gross property assets $1.4bn • CLP e
Slide 45: Charter Hall Prime Industrial Fund (CPIF)
Charter Hall | Charter Hall Group Half Year Results I 24 February 2017 Charter Hall Prime Industrial Fund (CPIF) For personal use only Key events during 1H FY17 Portfolio characteristics Key metrics • CPIF acquired three assets for $180m during the period including 50% of Gross property assets $2.0b
Slide 46: Appendix – Financial Result
Charter Hall | Charter Hall Group Half Year Results I 24 February 2017 Appendix – Financial Result For personal use only Laverton Cold Storage, VIC
Slide 47: Segment Earnings – Proportional Basis
Charter Hall | Charter Hall Group Half Year Results I 24 February 2017 Segment Earnings – Proportional Basis For personal use only Property Investments Property Funds 1H FY17 ($m) Management ($m) Total ($m) Property rental income 76.4 - 76.4 Property expenses (14.8) - (14.8) Management fee revenue -
Slide 48: Property Funds Management Operating Earnings
Charter Hall | Charter Hall Group Half Year Results I 24 February 2017 Property Funds Management Operating Earnings For personal use only $m 1H FY17 1H FY16 Change Change % Revenue Fund management fees 35.7 29.3 6.4 21.8% Transaction and performance fees 34.8 17.2 17.6 102.3% Investment management 7
Slide 49: Funds Management Platform Debt Profile
Charter Hall | Charter Hall Group Half Year Results I 24 February 2017 Funds Management Platform Debt Profile For personal use only • The hedge portfolio has a duration of 4.3 years • The passing weighted average hedge rate is 3.01% • The passing weighted average cost of debt is 4.28% Debt Maturity
Slide 50: Fund Key and Glossary
Charter Hall | Charter Hall Group Half Year Results I 24 February 2017 Fund Key and Glossary For personal use only 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 CLW Charter Hall Long WALE REIT C
Slide 51: Contact Us
Charter Hall | Charter Hall Group Half Year Results I 24 February 2017 Contact Us For personal use only David Harrison Phil Schretzmeyer Managing Director & Group CEO Joint Acting Chief Financial Officer Charter Hall Group Charter Hall Group T: +61 2 8651 9142 T: +61 2 8651 9246 david.harrison@chart
Slide 52: Disclaimer
Charter Hall | Charter Hall Group Half Year Results I 24 February 2017 Disclaimer For personal use only 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 pre
Slide 53: For personal use only
Sydney Charter Head Hall | Office Level 20, No.1 Martin Place Sydney, NSW, 2000 T: +61 2 8651 9000 For personal use only 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 Level 5, St