Charter Hall Group · ASX:CHC
Charter Hall — H1 FY2006 Earnings Presentation
32 slides from Charter Hall's earnings presentation, Feb 16, 2006
Slide 1: Charter Hall Group Half Year Results 2006
CHARTER HALL GROUP HALF YEAR RESULTS 2006 16 FEBRUARY 2006 CHARTER HALL HALF YEAR RESULTS 2006 1
Slide 2: Contents
CONTENTS 9 HALF YEAR SUMMARY 9 PROPERTY TRUST UPDATE 9 FUNDS UPDATE 9 HALF YEAR FINANCIALS 9 APPENDIX CHARTER HALL HALF YEAR RESULTS 2006 2
Slide 3: Summary
SUMMARY 9 Results on track 9 New funds launched 9 New assets acquired 9 New projects secured 9 New leases signed CHARTER HALL HALF YEAR RESULTS 2006 3
Slide 4: Key Events Since IPO
KEY EVENTS SINCE IPO DATE NEW FUNDS LAUNCHED ACQUISITIONS PROJECTS: NEW & COMPLETED LEASING DEALS Diversified Property Fund CHOF 4 FEB $14.7m Emirates House office asset 2nd project secured ($134m end value) 2006 acquired in Perth CBD Northbank Plaza, Brisbane CBD Core Plus Office Fund * Diversified
Slide 5: Financial Highlights on 30 Dec 05
FINANCIAL HIGHLIGHTS ON 30 DEC 05 Listing price 10 Jun 051 $0.75 ASX closing price $0.92 Total return since listing 27.6% LPT S&P/ASX 300 Index performance 12.7% Excess return 14.9% Market capitalisation2 $315m DPU (per stapled security)3 3.73c 1 1st installment only – 2nd installment payable 30 Jun
Slide 6: CHCCA Security Price Movement
CHCCA SECURITY PRICE MOVEMENT Core Plus Office Fund launched 130 Charter Hall Group AMEX lease signed at Atrium 125 Willis lease signed at Diversified Property Fund launched Bourke Street 120 115 Entry into S&P / ASX 300 Indexed to 100 110 CHOF4 raised LPT ASX 300 105 100 95 90 09-Jun-05 09-Aug-05 0
Slide 7: Assets Under Management
ASSETS UNDER MANAGEMENT 9 50% increase in core investment AUM since IPO 9 CHG well positioned to source acquisitions: 15 assets totalling $508m were acquired over last 12 months, 100% off-market Current AUM 1,250 $1,163m Opportunistic Assets (completion value) 1,000 Core Investment Assets 750 500 25
Slide 8: CHG Product Suite
CHG PRODUCT SUITE NEW PRODUCTS SINCE IPO EXISTING PRODUCTS AT IPO 9 CHARTER HALL OPPORTUNITY FUND 4 9 CHARTER HALL PROPERTY TRUST (CHOF 4) (CHPT) 9 PROPERTY DEVELOPMENT PORTFOLIO 9 DIVERSIFIED PROPERTY FUND (DPF) 2&3 (PDP 2&3) 9 CHARTER HALL INVESTMENT FUNDS 9 CORE PLUS OFFICE FUND (CPOF) * (CHIF 1-
Slide 9: CHG Products Span Entire Risk/Return Spectrum
CHG PRODUCTS SPAN ENTIRE RISK/RETURN SPECTRUM Return 18%+ OPPORTUNISTIC 15-17% ENHANCED UNIVERSE 12-14% CORE PLUS 9-11% CORE Risk Low High CORE CORE PLUS ENHANCED OPPORTUNISTIC DPF CHOF 4 CHG PRODUCTS CHPT CPOF * PDP 1,2,3 (JV with AMP) CHIF 1-6 INVESTMENT 70% passive property assets Passive investm
Slide 10: Property Trust (CHPT) Update
PROPERTY TRUST (CHPT) UPDATE CHARTER HALL HALF YEAR RESULTS 2006 10
Slide 11: Property Trust (CHPT)
PROPERTY TRUST (CHPT) 9 WALE increased to 6.1 years from PDS 5.2 years1,2 9 Occupancy increased to 95% (100% including income support) 9 All properties performing well 9 Pre-leasing at Nunawading on track – rents and tenant quality mix 9 CHPT to hold approx 20% stake in CPOF3 and DPF 1 Assumes rent
Slide 12: Property Trust (CHPT) Asset Diversification and Tenants
PROPERTY TRUST (CHPT) 9 Strong asset diversification and quality tenant composition Bourke 20.8% Industrial Kent 6.1% Gov't & Chullora 8.1% Gov't 4.8% Retail / Bulky DPF Related Goods Retail 3.3% 17.6% Menai 59.7% CPOF 13.0% Commercial National, 9.4% 34.2% Internat'l & Other Retail 15.3% Mentone Nun
Slide 13: Property Trust (CHPT) Lease Expiry Profile
PROPERTY TRUST (CHPT) LEASE EXPIRY PROFILE BY NET INCOME 50% Nunawading & Mentone represent uncommitted tenancies 40% Wilson Parking 30% Lease Expiry Profile 20% 10% 0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 DPF 5.7 CQU 6.5% CPOF 13.3 Harvey Norman 6.3% Mento
Slide 14: Property Trust (CHPT) Home HQ Nunawading
PROPERTY TRUST (CHPT) HOME HQ NUNAWADING 9 To be completed in August 2006 9 CHPT continues to receive 7.5% coupon on all funds drawn until completion plus a rent guarantee applies for 6 months post completion on 15% of GLA 9 Leasing progressing well – leases signed with 3 anchor “bookend” tenants in
Slide 15: Property Trust (CHPT) Mentone
PROPERTY TRUST (CHPT) MENTONE 9 Application for rezoning approved by VCAT and subsequently supported by Council. Development permit application submitted 9 Subject to final development permit and Nylex remediation and relocation, development likely to start on programme in Q1 FY07 9 Pre-leasing to c
Slide 16: Property Trust (CHPT) Bourke Street and 400 Kent Street
PROPERTY TRUST (CHPT) 570 BOURKE STREET 9 Willis Australia signed lease over levels 3, 4 & 5 9 Victorian Government signed lease over part of level 20 and HoA for balance of level 20 9 Occupancy level 100% 400 KENT STREET 9 Fit-out works by Central QLD University completed CHARTER HALL HALF YEAR RES
Slide 17: Funds Update
FUNDS UPDATE CHARTER HALL HALF YEAR RESULTS 2006 17
Slide 18: CHOF 4
CHOF 4 9 Launched in July 2005 after being significantly oversubscribed 9 Raised $165m of equity - largest opportunity fund in Australia 9 Capacity created for over $500m of project end value 9 2 projects in Brisbane underway with total end value of approx $160m 9 Balance of equity to be allocated o
Slide 19: CHOF 4 Projects
CHOF 4 PROJECT 1: NORTHBANK PLAZA, BRISBANE (STAGE 1) 9 Refurbishment of existing 26,000sqm office building 9 50/50 JV with local development & investment group Indigo 9 Completion Value $134m, Completion Date late 2007 9 Stage 2 (adjacent site co-owned by CHOF 4) under investigation for a new A-gra
Slide 20: PDP Funds
PDP FUNDS 9 Performance fees forecast in Prospectus/PDS for FY06 have been achieved (75% of Atrium fee recognised in Jan 06, 25% in FY07) 9 PDP 2: Atrium Pyrmont sold to CHG’s CPOF for $137m 9 PDP 2: Bourke Street Alexandria sold to owner occupier 9 PDP 3: Zone Site 5, Sydney Olympic Park pre-leased
Slide 21: Diversified Property Fund
DIVERSIFIED PROPERTY FUND 9 Launched in September 2005 9 Current AUM $48m comprising 5 assets in 4 states, NSW, QLD, WA and VIC 9 Targeting asset size in $5-30m price bracket 9 Open-ended fund with strong potential for growth – primary vehicle for CHIF AUM growth 9 CHG receives acquisition, funds ma
Slide 22: Diversified Property Fund Diversification
DIVERSIFIED PROPERTY FUND 9 Good asset diversification and quality tenant composition St Georges Tce Perth CBD WA 30.5% Other Mulgrave 30.5% QLD 8.7% Melb Metro 9.8% 11.9% National, Internat'l & Retail St Pauls Tce Chain Gov't Brisbane Fringe Kent St 64.9% 9.8% Related Sydney CBD NSW 26.4% 24.7% VIC
Slide 23: Core Plus Office Fund (CPOF)
CORE PLUS OFFICE FUND (CPOF) 9 Launched in December 2005 and $137m seed asset acquired 9 Open-ended fund targeting institutional investors 9 Target raising $250-500m of equity providing up to $1,100m asset capacity 9 Fund to hold primarily passive and some assets with enhanced component 9 Annual fun
Slide 24: CPOF Seed Asset Atrium
CORE PLUS OFFICE FUND (CPOF) SEED ASSET 9 $137m, 20,000sqm Atrium acquired from PDP 2 9 Pre-leased to AMEX and Coles Supermarket 9 Located in Pyrmont on Sydney’s CBD fringe 9 Stable, secure and growing distribution yields 9 A-Grade office building with retail area & parking 9 Under construction unti
Slide 25: Half Year Financials
HALF YEAR FINANCIALS CHARTER HALL HALF YEAR RESULTS 2006 25
Slide 26: Financials: Income Statement
FINANCIALS 1. 75% of Atrium INCOME STATEMENT ($000’s) 6 mths to 31 Dec 05 performance fee recognised in Jan 06 Net Rental Income 5,766 and 25% in FY07 and hence not included in Income guarantee on rental income 600 the H1 FY06 results Management fee income1 5,065 2. Tax expense is a credit due to a
Slide 27: Financials: Balance Sheet and Metrics
FINANCIALS BALANCE SHEET ($000’s) Current assets 83,344 Non current assets 251,386 Total assets 334,730 Current liabilities 24,112 Non current liabilities 118,587 Total liabilities 142,699 Equity 192,031 FINANCIAL METRICS (000’s) Property investments $240,088 Borrowings $116,666 Gearing 1 34.9% Secu
Slide 28: Capital Management
CAPITAL MANAGEMENT DEBT Facility limit $225m Amount drawn at 31 December 2005 * $117m (or 52%) Average amount drawn for the period $44m Hedged component 97% Weighted average maturity – facilities 3 year evergreen Weighted average maturity – hedges 6.3 yrs Weighted average fixed rate 6.49% Weighted a
Slide 29: Appendix
APPENDIX CHARTER HALL HALF YEAR RESULTS 2006 29
Slide 30: Charter Hall Group Structure
CHARTER HALL GROUP BOARD OF DIRECTORS 2 Executive (Andre Biet and Cedric Fuchs), 2 Non-executive, 4 Independent Stapled & Managed via Responsible Entity CHARTER HALL FUNDS MANAGEMENT LTD CHARTER HALL CHARTER HALL LIMITED PROPERTY TRUST Joint CEO Joint CEO David Harrison David Southon FUNDS PROPERTY
Slide 31: New Products Since IPO
NEW PRODUCTS SINCE IPO FUND EQUITY ($m) AUM ($m) DESCRIPTION 9 Property development, Australia wide $350 9 Target Equity IRR 20+, gearing 65% of completion value Opportunity To be 9 Wholesale (institutional) investors , closed end, CHPT committed $5m investment $165 Fund 4 identified 9 Equity invest
Slide 32: Existing Products at IPO
EXISTING PRODUCTS AT IPO FUND EQUITY ($m) AUM ($m) DESCRIPTION 9 Property development, eastern seaboard Property $269 $694 9 Target Equity IRR 25+, gearing 65% of completion value Development Completed 9 Wholesale (institutional) investors , closed end, equity invested with 2 and repatriated Portfol