Charter Hall Group · ASX:CHC
Charter Hall — FY2017 Earnings Presentation
53 slides from Charter Hall's earnings presentation, Aug 23, 2017
Slide 1: 2017 Full Year Results
23 August 2017 Charter Hall Group For personal use only 2017 Full Year Results 12 months to 30 June 2017 Western Sydney University, Parramatta, NSW
Slide 2: Agenda
Charter Hall | Charter Hall Group Full Year Results I 23 August 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 Russell Proutt Managing Director
Slide 3: Group Highlights
Charter Hall | Charter Hall Group Full Year Results I 23 August 2017 Group Highlights For personal use only Artist impression of 11 Breakfast Creek Road, Newstead, QLD
Slide 4: Group Highlights – FY17
Charter Hall | Charter Hall Group Full Year Results I 23 August 2017 Group Highlights – FY17 For personal use only Group Returns Property Investments Funds Management Balance Sheet 19.8% 19.7% statutory profit 13.7% FUM growth 0% balance sheet Total Property growth to $19.8bn gearing4 Investment Ret
Slide 5: Our Strategy
Charter Hall | Charter Hall Group Full Year Results I 23 August 2017 Our Strategy We use our property expertise to access, deploy, manage and invest equity in our core real estate sectors – For personal use only office, retail and industrial – to create value and generate superior returns for our cu
Slide 6: Sustained Growth
Charter Hall | Charter Hall Group Full Year Results I 23 August 2017 Sustained Growth For personal use only Operating earnings per security growth1 Distributions per security growth 30.0cps 35.9cps 26.9cps 30.4cps 24.2cps 27.5cps 22.3cps 25.3cps 20.2cps 22.9cps 18.2cps 20.7cps FY12 FY13 FY14 FY15 FY
Slide 7: Property Funds Management
Charter Hall | Charter Hall Group Full Year Results I 23 August 2017 Property Funds Management For personal use only Reject Shop Distribution Centre, VIC
Slide 8: Group Funds Management Portfolio
Charter Hall | Charter Hall Group Full Year Results I 23 August 2017 Group Funds Management Portfolio For personal use only No. of Portfolio Portfolio No. of Gross WALE1 Occupancy WACR2 Tenant Value ($bn) Size (m sqm) Assets Income ($m) (years) (%) (%) Customers 30 Jun 17 19.8 5.6 329 2,658 1,454 7.
Slide 9: Funds Under Management Growth
Charter Hall | Charter Hall Group Full Year Results I 23 August 2017 Funds Under Management Growth For personal use only Funds under management movement ($bn) Funds under management by equity source ($bn) $3.0bn ($2.3bn) $19.8bn $0.5bn $19.8bn $17.5bn $2.8bn $1.1bn $2.5bn $4.1bn $13.6bn $17.5bn $2.5
Slide 10: Property Investment Portfolio Returns
Charter Hall | Charter Hall Group Full Year Results I 23 August 2017 Property Investment Portfolio Returns For personal use only • The Total Property Investment Return1 from 30 June 2012 to 30 June 2017 is 14.7% per annum, outperforming the MSCI/IPD Unlisted Wholesale Property Fund Index (NAV post f
Slide 11: Transactional Activity
Charter Hall | Charter Hall Group Full Year Results I 23 August 2017 Transactional Activity For personal use only • Transaction revenue is a regular feature of earnings which we expect to continue • Performance fees continue to contribute to PFM earnings with whole of fund/partnership fees expected
Slide 12: Development Activity
Charter Hall | Charter Hall Group Full Year Results I 23 August 2017 Development Activity Continues to drive asset creation and attract capital For personal use only • Development activity is undertaken by funds/partnerships to enhance income yield and total returns • In-house development skills are
Slide 13: Equity Flows
Charter Hall | Charter Hall Group Full Year Results I 23 August 2017 Equity Flows Equity flows have generated $3bn in undrawn debt and cash within funds platform For personal use only Diversified equity sources with $2,336m gross equity raised during the year including: • $988m in Listed Funds inclu
Slide 14: Property Investment
Charter Hall | Charter Hall Group Full Year Results I 23 August 2017 Property Investment For personal use only 570 Bourke Street, Melbourne, VIC
Slide 15: Property Investment Portfolio
Charter Hall | Charter Hall Group Full Year Results I 23 August 2017 Property Investment Portfolio For personal use only Tenant Portfolio No. of WALE2 Occupancy WARR3 WACR4 WADR5 Retention Rate Value ($m)1 Properties (years) (%) (%) (%) (%) (%) 30 Jun 17 1,527 292 7.4 97.7 3.6 6.09 7.3 76.2% 30 Jun
Slide 16: Property Investment Portfolio Movement
Charter Hall | Charter Hall Group Full Year Results I 23 August 2017 Property Investment Portfolio Movement • During the year the Property Investment Portfolio increased by 39% (+$430m) to $1,527m including: For personal use only $304m of net investments $118m of property valuations (net) • Attr
Slide 17: Capital Deployment
Charter Hall | Charter Hall Group Full Year Results I 23 August 2017 Capital Deployment For personal use only • On 28th April 2017, Charter Hall announced to the market a $275m Institutional Placement to fund the majority of $333m of contracted, committed or identified investments • Capital deployme
Slide 18: Major Cross Sector Tenant Customer Relationships
Charter Hall | Charter Hall Group Full Year Results I 23 August 2017 Major Cross Sector Tenant Customer Relationships For personal use only Overview of Wesfarmers Subsidiary Leases Overview of Woolworths Group Subsidiary Leases Sector Area Tenancies Sector Area Tenancies (NLA ‘000’s m2) (#) (NLA ‘00
Slide 19: Sustainability
Charter Hall | Charter Hall Group Full Year Results I 23 August 2017 Sustainability For personal use only Charter Hall has Australia’s largest Green Star footprint with 178 Green Star Performance ratings Charter Hall have joined international philanthropy movement Pledge 1%. across operating assets,
Slide 20: Financial Result
Charter Hall | Charter Hall Group Full Year Results I 23 August 2017 Financial Result For personal use only Salamander Bay, Port Stephens, NSW
Slide 21: Income Statement
Charter Hall | Charter Hall Group Full Year Results I 23 August 2017 Income Statement OEPS pre-tax growth of 33.3% For personal use only $m FY17 FY16 Change % • OEPS post-tax growth of 18.1% to 35.9cps and DPS PI operating earnings 85.0 78.5 8.2% growth of 11.5% to 30.0cps PFM operating earnings pre
Slide 22: Segment Result
Charter Hall | Charter Hall Group Full Year Results I 23 August 2017 Segment Result For personal use only $m FY17 FY16 Change % • PI operating earnings growth driven by: PI revenue 84.8 78.5 8.0% 3.6% WARR across Property Investments Portfolio Strong market rental reversions in Office Interest a
Slide 23: Property Funds Management Composition
Charter Hall | Charter Hall Group Full Year Results I 23 August 2017 Property Funds Management Composition Scalable Business Model For personal use only $m FY17 FY16 Change % • PFM revenue up 34.2% to $178.5m Fund management fees 75.0 62.6 19.9% • Investment Management revenue up 41.1% to $131.6m: T
Slide 24: Cashflow
Charter Hall | Charter Hall Group Full Year Results I 23 August 2017 Cashflow For personal use only • FY17 Distribution covered 118% by operating cashflow • Working capital movement driven by timing of fees and payment of expenses $19.5m $0.2m $156.3m $151.2m ($11.7m) ($7.9m) $3.6m $1.4m $132.1m Ope
Slide 25: Balance Sheet
Charter Hall | Charter Hall Group Full Year Results I 23 August 2017 Balance Sheet Significant liquidity For personal use only $m 30 June 2017 30 June 2016 Change % • Strong balance sheet maintained: Cash $174m $145m 20.0% Cash position of $174m to fund identified and pipeline Property Investments
Slide 26: Debt and Capital Management
Charter Hall | Charter Hall Group Full Year Results I 23 August 2017 Debt and Capital Management For personal use only Key debt metrics funds platform Jun 17 Jun 16 • Substantial funding capacity available across the funds platform Combined fund facility limits ($m) 8,611 7,527 with $3.0bn of availa
Slide 27: Outlook & Guidance
Charter Hall | Charter Hall Group Full Year Results I 23 August 2017 Outlook & Guidance For personal use only 333 George Street, Sydney, NSW
Slide 28: FY18 Earnings Guidance
Charter Hall | Charter Hall Group Full Year Results I 23 August 2017 FY18 Earnings Guidance For personal use only We believe the investment landscape will continue to accommodate growth • Relative attractiveness of real assets • Continued equity flows expected to real assets for institutional fund m
Slide 29: Additional Information
Charter Hall | Charter Hall Group Full Year Results I 23 August 2017 Additional Information For personal use only 1. Property Funds Management 2. Property Investments 3. Financial Result Berrinba Distribution Centre, QLD
Slide 30: Appendix – Property Funds Management
Charter Hall | Charter Hall Group Full Year Results I 23 August 2017 Appendix – Property Funds Management For personal use only 1 Shelley Street, Sydney, NSW
Slide 31: Charter Hall Group Overview
Charter Hall | Charter Hall Group Full Year Results I 23 August 2017 Charter Hall Group Overview1 For personal use only 2 77 Assets valued at $0.1bn Assets valued at $3.7bn Office 0 Office 10 Retail 1 Retail 48 Industrial 1 Industrial 19 NT QLD 104 46 Assets valued at $7.9bn Assets valued at $2.7bn
Slide 32: Charter Hall Managed Funds
Charter Hall | Charter Hall Group Full Year Results I 23 August 2017 Charter Hall Managed Funds For personal use only Office $9.1bn Industrial $5.2bn Retail $5.5bn CHOT CPOF1 BSWF1 CLP CPIF LWHP RP22 LWIPs3 $2.6bn $3.4bn $0.5bn $1.3bn $2.3bn $0.7bn $0.1bn $0.6bn Wholesale Equity 75 Mandates RP6 Mand
Slide 33: Office
Charter Hall | Charter Hall Group Full Year Results I 23 August 2017 Office “As one of the largest managers of CBD office properties in Australia, our strategy to For personal use only actively manage our portfolio is creating enhanced value for investors through the successful re-development of exi
Slide 34: Industrial
Charter Hall | Charter Hall Group Full Year Results I 23 August 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 tenant
Slide 35: Retail
Charter Hall | Charter Hall Group Full Year Results I 23 August 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 growing
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 Since Inception
Charter Hall | Charter Hall Group Full Year Results I 23 August 2017 Direct Funds Net Returns Since Inception For personal use only • Charter Halls active Direct Syndicates & Funds have an average return of 13.0% p.a. Outperforming the MSCI/IPD Unlisted Core Wholesale Property Funds Index by an aver
Slide 38: Portfolio Performance Review Dates
Charter Hall | Charter Hall Group Full Year Results I 23 August 2017 Portfolio Performance Review Dates For personal use only Fund Portfolio Performance Review Dates Charter Hall Office Trust (CHOT) FY20 Charter Hall Prime Office Fund (CPOF) 3 yearly – FY18 Brisbane Square Wholesale Fund (BSWF) 3 ye
Slide 39: Appendix – Property Investment
Charter Hall | Charter Hall Group Full Year Results I 23 August 2017 Appendix – Property Investment For personal use only No.1 Martin Place, Sydney, NSW
Slide 40: Property Investment Portfolio
Charter Hall | Charter Hall Group Full Year Results I 23 August 2017 Property Investment Portfolio For personal use only Ownership Stake Charter Hall Charter Hall ($m) WALE WACR WADR WARR PI Yield2 (%) Investment Income Office 549.1 25.3 5.6 5.8% 7.1% 3.7% 7.3% Charter Hall Office Trust (CHOT) 14.3%
Slide 41: Charter Hall Retail REIT (CQR)
Charter Hall | Charter Hall Group Full Year Results I 23 August 2017 Charter Hall Retail REIT (CQR) For personal use only Key events during FY17 Key Metrics • Acquired Arana Hills Plaza, QLD for $67.1m Gross property assets $2.8bn • Disposal of non-core assets for $81.2m reflecting a combined 5.8% y
Slide 42: Charter Hall Office Trust (CHOT)
Charter Hall | Charter Hall Group Full Year Results I 23 August 2017 Charter Hall Office Trust (CHOT) For personal use only Key events during FY17 Key metrics Gross property assets $2.6bn • The Fund achieved a 40.3% return for the 12 months to June 2017 Total debt $1.1bn • The portfolio was independ
Slide 43: Charter Hall Prime Office Fund (CPOF)
Charter Hall | Charter Hall Group Full Year Results I 23 August 2017 Charter Hall Prime Office Fund (CPOF) For personal use only Key events during FY17 Key metrics • The Fund achieved a 19.2% return for the 12 months to 30 June 2017 being the highest Gross property assets $3.4bn performing office fu
Slide 44: Charter Hall Long WALE REIT (CLW)
Charter Hall | Charter Hall Group Full Year Results I 23 August 2017 Charter Hall Long WALE REIT (CLW) For personal use only Key events during FY17 Key metrics • Successful listing on the ASX on 8 November 2016 Gross property assets $1.4bn • Upgraded FY17 operating EPU 1.4% vs PDS forecast1 Total de
Slide 45: Core Logistics Partnership (CLP)
Charter Hall | Charter Hall Group Full Year Results I 23 August 2017 Core Logistics Partnership (CLP) For personal use only Key events during FY17 Key metrics • CLP divested six assets for a combined realisation of $353m in FY17. These sales Gross property assets $1.3bn improved portfolio quality, e
Slide 46: Charter Hall Prime Industrial Fund (CPIF)
Charter Hall | Charter Hall Group Full Year Results I 23 August 2017 Charter Hall Prime Industrial Fund (CPIF) For personal use only Key events during FY17 Key metrics • CPIF settled on seven acquisitions for $311m during the period including 50% of Gross property assets $2.3bn Truganina Distributio
Slide 47: Appendix – Financial Result
Charter Hall | Charter Hall Group Full Year Results I 23 August 2017 Appendix – Financial Result For personal use only Target, Drystone Industrial Estate, 441 Doherty Road, Truganina, VIC
Slide 48: Segment Earnings – Proportional Basis
Charter Hall | Charter Hall Group Full Year Results I 23 August 2017 Segment Earnings – Proportional Basis For personal use only FY17 ($m) Property Funds Property Investments Management Total Property rental income 157.4 - 157.4 Property expenses (31.4) - (31.4) Management fee revenue - 158.7 158.7
Slide 49: Funds Management Platform Debt Profile
Charter Hall | Charter Hall Group Full Year Results I 23 August 2017 Funds Management Platform Debt Profile For personal use only • The hedge portfolio has a duration of 3.8 years • The weighted average hedge rate is 2.88% • The weighted average cost of debt is 4.11% Debt expiry profile ($m) Group h
Slide 50: Fund Key and Glossary
Charter Hall | Charter Hall Group Full Year Results I 23 August 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 DIF2, DIF3, DIF4 Direct Industrial
Slide 51: Contact Us
Charter Hall | Charter Hall Group Full Year Results I 23 August 2017 Contact Us For personal use only David Harrison Russell Proutt Managing Director & Group CEO Chief Financial Officer Charter Hall Group Charter Hall Group T: +61 2 8651 9142 T: +61 2 8651 9493 david.harrison@charterhall.com.au russ
Slide 52: Disclaimer
Charter Hall | Charter Hall Group Full Year Results I 23 August 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 prepare
Slide 53: Charter Hall office addresses
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