Charter Hall Group · ASX:CHC
Charter Hall — Investor Presentation (May 2006)
34 slides from Charter Hall's investor presentation, May 18, 2006
Slide 1: Charter Hall Group Entitlement, Placement and Public Offer
Charter Hall Group Entitlement, Placement and Public Offer 18 May 2006
Slide 2: Disclaimer
Disclaimer NOT FOR DISTRIBUTION IN THE UNITED STATES This presentation has been prepared by the Charter Hall Group (ACN 113 531 150) (CHG). The information in this presentation is general information only and is not intended as investment or financial advice and must not be relied upon as such. You
Slide 3: Contents
Contents 1. Overview of the Offer 2. Overview of acquisitions and key benefits 3. Acquired assets 4. Charter Hall update and portfolio impact 5. Offer Details Appendix A - Financials 3
Slide 4: Overview of the Offer
CHARTER HALL 1. Overview of the Offer
Slide 5: Overview of the Offer
Overview of the Offer The Charter Hall Group (“Charter Hall”) is raising $100 million through an accelerated non-renounceable Entitlement Offer, Placement and Public Offer (together the “Offer”) of New Securities Entitlement ratio of two New Securities for every nine Existing Securities held at the
Slide 6: Overview of acquisitions and key benefits
2. Overview of acquisitions and key benefits
Slide 7: Acquisitions
Acquisitions The proceeds of the Offer will be used to fund: The acquisition of two properties for the Charter Hall Property Trust (“CHPT”) Investment in the Atrium property which will seed CPOF. CHPT will fund this asset until CPOF closes (expected to be June 2006) Future commitments for CPOF and D
Slide 8: Key benefits
Key benefits Financial Upgrade FY06 DPS to 7.10 cps (increase of 8.2% above IPO forecast) FY07 DPS of 9.53 cps (8.9% distribution growth on FY06 IPO forecast of 8.75 cps on a fully paid basis) Decrease in gearing from 32% to 11% (decrease of 65.6%) Significant debt capacity over and above CPOF commi
Slide 9: Key benefits
Key benefits Financial Increase in NTA per security from $0.73 to $0.84 (increase of 15.0%) Increase in market cap of 28.4% from $376 million to $483 million Moving towards entry in S&P/ASX 200 Listed Property Trust index NTA Market Cap1 Index weighting1 $0.84 $483m 0.45% 15.0% 28.4% 32.5% 15.0% [x]
Slide 10: Key benefits
Key benefits Financial (cont.) Improved Trust and Corporate earnings split Greater Trust earnings with acquisition of new properties Greater recurring earnings with establishment of CPOF and DPF Once CPOF is fully invested the earnings split will improve further Recurring earnings exposure1 FY06 EBI
Slide 11: Key benefits
Key benefits Financial (cont.) Improvement in Distributions FY06 upgrade in DPS (8.2% increase) FY07 forecast DPS (34.2% increase above revised FY06) Distribution per Security DPS Yield1 9.53cps +19.1% +10.1% 7.10cps 6.56cps 6.85% +8.2% 6.23% 5.75% FY06 IPO FY06 Revised FY07 F'cast FY06 IPO FY06 Rev
Slide 12: Key benefits
Key benefits Portfolio Lease expiry profile by net income post offer WALE increase from 5.2 to 5.9 years 50% Nunawading & Mentone represent uncommitted tenancies NLA increase by 41.5% from 143,583 40% Wilson Parking sqm to 203,104 sqm 30% Lease Expiry Profile Improved sector diversity 20% 10% Improv
Slide 13: Management participation
Management participation Directors, staff and original vendors have confirmed their intention to take up 14% of the Entitlement Offer, representing approximately $11 million Both CEO’s take up full Entitlement Offer, representing approximately $1.75 million each Charter Hall’s Long Term Incentive Pl
Slide 14: Acquired assets
CHARTER HALL 3. Acquired assets
Slide 15: Acquired assets: Melbourne Airport Industrial Park
Acquired assets Melbourne Airport Industrial Park, Tullamarine Key property information Location Tullamarine, VIC This acquisition comprises two separate Sector Industrial properties with a total of three tenancies Purchase Price $23.6m Separate 41 year leasehold titles Total NLA 30,800 sqm Initial
Slide 16: Acquired assets: Nepean Highway, Mentone
Acquired assets 25 Nepean Highway, Mentone Key property information The complex comprises six tenancies and a Location Lot 2, 25 Nepean Highway Mentone, VIC 193m frontage to the Nepean Highway Sector Bulky retail The complex comprises a site area of 15,780 Purchase Price $21.9m sqm and a lettable ar
Slide 17: Acquired assets: Atrium
Acquired assets Atrium Key property information This seed asset for CPOF will be funded by Location 60 Union Street, Pyrmont, NSW CHPT until CPOF close (expected to be June Sector Office 2006) Purchase Consideration (100% basis) $137.0m Total NLA 19,832sqm Upon completion1 the property will comprise
Slide 18: CPOF co-investment
Acquired assets CPOF co-investment CHPT has committed to co-invest $100 million in the Core Plus Office Fund, a new fund launched by Charter Hall in December 2005 The commitments will be funded progressively as the fund draws down equity from investors (i.e. when acquisition opportunities have been
Slide 19: DPF co-investment
Acquired assets DPF co-investment Diversified Property Fund (DPF) is an open-ended fund targeting core investment assets The mandate of the fund is to invest in passive quality assets In office, retail and industrial sectors Acquisition range of $5 million to $30 million per property Charter Hall Pr
Slide 20: Charter Hall update and portfolio impact
4. Charter Hall update and portfolio impact
Slide 21: Delivering on stated objectives
Charter Hall update Delivering on stated objectives NEW CHG PRODUCTS SINCE IPO EXISTING CHG PRODUCTS AT IPO 9 CHARTER HALL OPPORTUNITY 9 CHARTER HALL PROPERTY TRUST FUND 4 (CHOF 4) (CHPT) 9 DIVERSIFIED PROPERTY FUND 9 PROPERTY DEVELOPMENT (DPF) PORTFOLIO 2&3 (PDP 2&3) 9 CHARTER HALL INVESTMENT 9 COR
Slide 22: Key events since IPO
Charter Hall update 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 Second project secured ($134m end value) 2006 acquired in Perth CBD Northbank Plaza, Brisbane CBD Core Plus Of
Slide 23: New Products since IPO
Charter Hall update New Products since IPO FUND EQUITY ($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 identi
Slide 24: Funds and assets under management
Charter Hall update Total investment funds, listed property trust and opportunity assets under management totalling $1.21 billion CH Funds CHIF’s CHOF’s CHPT post offer DPF CPOF Asset Value $139m $587m $320m $48m $137m Commenced 1996 1997 2005 2005 2005 Target Asset size $5m – $30m $30m – $100m Non-
Slide 25: Portfolio impact
Portfolio impact Pre Offer Portfolio Acquisition Portfolio Post Offer Number of Properties 6 3 9 Number of Tenants 53 11 64 Purchase Consideration ($m) 259.91 59.82 319.72 Total NLA (sqm) 143,583 59,521 203,104 WALE (Years) 5.2 9.1 5.9 Notes 1. Pro forma including Nunawading and Mentone on completio
Slide 26: Portfolio impact
Portfolio impact Asset Acquisition Trust Interest (%) Valuation ($’000) Acquisition yield Weighted Average % completed property Date (%) Lease Expiry portfolio (by valuation) (years) Acquired properties Melbourne Airport May 2006 100 23,670 7.85 7.0 7.4 Industrial Park, Tullamarine 25 Nepean Highway
Slide 27: Offer details
CHARTER HALL 5. Offer details
Slide 28: Sources and application of funds
Offer details Sources and application of funds $ million Sources Entitlement Offer (approximately) 80.0 Placement (approximately) 20.0 Total sources of funds 100.0 Application Melbourne Airport Industrial Park, Tullamarine 23.6 25 Nepean Highway, Mentone1 23.1 Atrium property, representing a co-inve
Slide 29: Offer details: pricing
Offer details Pricing Security price Implied Discount Amount Raised: Approximately $80.0 million Adjusted prior day $1.311 via an Entitlement Offer and approximately VWAP $20.0 million via a Placement Issue price $1.27 3.1% Entitlement Ratio: 2 for 9 Number of New Securities (millions) 78.7 Ranking:
Slide 30: Recap of investment case
Recap of investment case The Offer provides Charter Hall with the opportunity to deliver strong financial forecasts on the back of an upgraded forecast for FY06 Upgrade FY06 DPS to 7.10 cps (increase of 8.2% over IPO forecast) FY07 DPS of 9.53 cps (8.9% distribution growth on FY06 IPO forecast of 8.
Slide 31: Timetable
Timetable Event Date Offer to Institutional Securityholders opens 11:00am 18 May 2006 Offer to Domestic Institutional Securityholders closes 6:00pm 18 May 2006 Offer to International Institutional Securityholders closes 6:00am 19 May 2006 Record Date 24 May 2006 Offer open to Retail Securityholders
Slide 32: Appendix A - Financials
CHARTER HALL Appendix A - Financials
Slide 33: Financials
Financials Statement of Financial Performance Charter Hall Group - yr ending 30 June ($000s) IPO FY06 forecast Upgraded FY06 forecast FY07 forecast Income Net Rental income 11,766 11,962 18,839 Income guarantee on rental income 450 1,086 813 Management fee income 12,366 12,577 17,700 Other income 1,
Slide 34: Consolidated Balance Sheet
Financials Consolidated Balance Sheet C h a rte r H a ll G ro u p ($ '0 0 0 ) 3 1 -D e c -0 5 A t a llo tm e n t A t c o m p le tio n C u rre n t A s s e ts C ash 8 ,3 1 5 9 4 ,4 6 1 1 8 ,4 1 4 R e c e iva b le s 6 9 ,9 1 5 7 1 ,9 3 7 3 ,8 9 5 O th e r a s s e ts 5 ,1 1 4 5 ,1 1 4 5 ,1 1 4 T o ta l
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