Slide 1: 2019 Full Year Results
Charter Hall Group 2019 Full Year Results 20 August 2019 Charter Hall Group 2019 Full Year Results 2 Chifley Square, Sydney NSW
Slide 2: Agenda
1 Highlights and Strategy 2 Property Funds Management 3 Property Investment Agenda 4 Financial Result 5 Outlook and Guidance 6 Additional Information David Harrison Sean McMahon Russell Proutt Managing Director Chief Investment Officer Chief Financial Officer & Group CEO Charter Charter Hall Hall Gr
Slide 3: Highlights and Strategy
Highlights and Strategy Campbellfield Plaza, Vic Charter Hall Group 2019 Full Year Results Chullora Logistics Park, 2 Hume Highway, Chullora NSW 3
Slide 4: Group highlights
Highlights and Strategy Group highlights1 Group investment capacity of $4.1bn Group Returns Property Investments Funds Management Balance Sheet Operating earnings Total property investment return4 FUM growth Balance sheet gearing $ 221m 9.1% 31.1% 5.4% Statutory profit2 to Investment Capacity $ 235m
Slide 5: Our strategy
Highlights and Strategy Our strategy We use our property expertise to access, deploy, manage and invest equity in our core real estate sectors to create value and generate superior returns for our customers. Access Deploy Manage Invest Accessing equity from listed, wholesale Creating value through a
Slide 6: Sustained growth
Highlights and Strategy Sustained growth Strong growth in earnings underpinning distribution growth Operating earnings per security growth Distributions per security growth DPS (grossed up) DPS 1 40.0cps Pre-tax OEPS 36.9cps Post-tax OEPS 56.3cps 30.0cps 33.7cps 31.8cps 43.5cps 26.9cps 40.5cps 47.4c
Slide 7: Property Funds Management
Property Funds Management Campbellfield Plaza, Vic Charter Hall Group 2019 Full Year Results 130 Lonsdale Street, Melbourne VIC 7
Slide 8: Group funds management portfolio
Property Funds Management Group funds management portfolio 82% east coast weighting Portfolio value Lettable area No. of No. of Net income1 WALE1 Occupancy1 WACR ($bn) (m sqm) Properties Tenancies ($m) (years) (%) (%) 30 June 2019 30.4 6.6 844 3,419 1,713 8.2 97.9 5.58 30 June 2018 23.2 5.4 330 2,44
Slide 9: Funds under management growth
Property Funds Management Funds under management growth 5 year FUM growth of 21.5% per annum • FUM growth of 31.1% in FY19, to $30.4bn Funds under management movement ($bn) Funds under management by equity source ($bn) Wholesale Listed Retail $30.4bn $30.4bn $1.0bn $5.0bn $1.2bn $1.6bn $23.2bn $6.3b
Slide 10: FY19 transactional activity
Property Funds Management FY19 transactional activity • Acquisition activity led by the Office and Industrial sectors Long WALE Shopping Centre Social ($m) Office Industrial Total Retail Retail Infrastructure / Other Acquisitions 2,266 899 505 304 177 4,151 Divestments (491) (107) (38) (164) (5) (80
Slide 11: Development activity
Property Funds Management Development activity Continues to drive asset creation and attract capital • Development completions have added $1.1bn of FUM over the last 12 months • Majority of committed projects are de-risked through pre-leases and fixed • Development pipeline has increased from $3.5bn
Slide 12: Leasing activity
Property Funds Management Leasing activity Deals completed over the last 12 months Social Office Industrial Retail Infrastructure Existing assets leased 174,511 392,389 125,899 8,668 (lettable area sqm) Major leases Developments leased 32,1571 183,195 - 2,517 (lettable area sqm) Major leases Lettabl
Slide 13: Equity flows
Property Funds Management Equity flows 37,000 investor customers across Wholesale, Listed & Direct Diversified equity sources with $3.4bn gross equity raised across 16 funds in the 12 months to 30 June 2019: • Strong wholesale equity flows with $1.8bn raised in pooled funds CPOF and CPIF • 5 success
Slide 14: FY20 – Year to date FUM
Property Funds Management FY20 – Year to date FUM $4.4bn of transactions since 30 June 2019 $0.2bn $0.1bn ($0.1bn) $34.6bn $0.6bn $0.7bn $0.8bn $30.4bn $1.8bn Jun-19 Chifley Tower, Sydney 242 Exhibition St, Telstra Exchanges 201 Elizabeth St, Metcash Brisbane ATO Mount Gravatt Divestments Aug-19 Mel
Slide 15: Property Investment
Property Investment Charter Hall Group 2019 Full Year Results 242 Exhibition Street, Melbourne VIC 15
Slide 16: Property investment portfolio
Property Investment Property investment portfolio 81% east coast weighting Portfolio value No of WALE1 Occupancy1 WARR WACR WADR ($m) properties (years) (%) (%) (%) (%) 30 June 2019 1,844 793 7.6 97.7 3.5 5.64 6.9 30 June 2018 1,706 298 7.2 97.9 3.6 5.80 7.1 Diversification by property investment Di
Slide 17: Property investment portfolio movement
Property Investment Property investment portfolio movement • During the 12 months to 30 June 2019 the property investment portfolio increased by 8.1% (+$138m) to $1,844m predominantly driven by the investment in CQE • PI yield of 6.3% remains attractive Property investment movement Property investme
Slide 18: Diversified earnings resilience
Property Investment Diversified earnings resilience Top 10 asset exposures represent only 11.4% of earnings • 72% repeat customers across 1,933 leases • Tenant retention rate of 69% for the 12 months to 30 June 2019 Top 10 tenants by net income Property investment earnings (by sector) Top 10 asset e
Slide 19: Environment, Social & Governance
Property Investment Environment, Social & Governance Environment Social Governance Leading green initiatives Create strong and engaged communities Embed a high standard of ethics into our actions • Australia’s largest Green Star footprint • Our People - 378 employee volunteer days • Developed and la
Slide 20: Financial Result
Financial Result Charter Hall Group 2019 Full Year Results 1, 10 & 12 Shelley Street, Sydney NSW 20
Slide 21: Earnings summary
Financial Result Earnings summary • EBITDA of $275.2m, a 34.1% increase over FY18 ($m) FY18 FY19 Change % - Expansion of property funds management platform continuing to underpin PI EBITDA 103.8 110.8 6.7% organisational growth DI EBITDA - 7.8 • Interest expense in FY19 attributable to USPP issuance
Slide 22: Property funds management
Financial Result Property funds management • PFM revenue up 39.0% to $262.9m ($m) FY18 FY19 Change % • Investment management revenue up 45.8% to $210.3m: Fund management fees 88.0 114.0 29.5% - Continued momentum in FUM driving funds management fee growth of 29.5% Transaction and performance fees 56
Slide 23: Operating cashflow
Financial Result Operating cashflow • FY19 distribution covered 123% by operating cashflow • The cashflow difference between FY19 operating earnings and operating cashflow is primarily driven by timing $9m ($33m) $221m $4m ($7m) $194m $157m 1 Operating Earnings Earnings vs distributions Non-cash ite
Slide 24: Balance sheet and return metrics
Financial Result Balance sheet and return metrics • Strong balance sheet maintained: ($m) 30-Jun-18 30-Jun-19 - Considerable financial flexibility with undrawn lines and cash in hand Cash 95 114 • NTA per security remains at $3.90 Property investment 1,706 1,844 Development investment 58 59 - Retain
Slide 25: Debt and capital management
Financial Result Debt and capital management • Group continued to be managed in line with strategy Key debt metrics funds platform 30-Jun-18 30-Jun-19 - Substantial funding capacity available across the Group with $4.1 billion of available Combined fund facility limits ($m) 10,256 12,872 liquidity C
Slide 26: Outlook and Guidance
Outlook and Guidance Charter Hall Group 2019 Full Year Results Woolworths Dandenong Centre, Dandenong South, VIC 26
Slide 27: FY20 earnings guidance
Outlook & Guidance FY20 earnings guidance Our guidance is as follows: • Based on no material change in current market conditions and reflects changes in FUM thus far in FY20, our FY20 guidance is for 18%-20% growth in post-tax operating earnings per security over FY19 • FY20 guidance also includes $
Slide 28: Additional Information
Additional Information • Management Team • Property Funds Management • Property Investment Charter Hall Group 2019 Full Year Results 1 Martin Place, Sydney NSW 28
Slide 29: Management Team
Appendix 6.1 Management Team Charter Charter Hall HallGroup Group2019 2019Full FullYear YearResults Results 29
Slide 30: Deep Management Bench
Appendix – Management Team Deep Management Bench Charter Hall Executive Leadership Group David Harrison Managing Director & Group CEO 31 years industry experience Sean McMahon Russell Proutt Natalie Devlin Adrian Taylor Richard Stacker Greg Chubb Steven Bennett Sheridan Ware Chief Investment Chief F
Slide 31: Property Funds Management
Appendix 6.2 Property Funds Management Charter Hall Group 2019 Full Year Results 31
Slide 32: Operational highlights
Appendix – Property Funds Management Operational highlights Office Industrial Retail Social Infrastructure 144 45 447 18 Leasing deals executed across Leasing deals executed across Leasing deals executed across Leasing deals executed across 207,000sqm 576,000sqm 57,000sqm 11,000sqm 12 130 Lonsdale L
Slide 33: Charter Hall group property overview
Appendix – Property Funds Management Charter Hall group property overview1 NT QLD 4 properties valued at $0.1bn 232 properties valued at $5.9bn Office - Office 17 Retail 1 Retail 51 Industrial 1 Industrial 30 Social Infrastructure 2 4 Social Infrastructure 134 WA 232 NSW/ACT 73 properties valued at
Slide 34: Charter Hall managed funds
Appendix – Property Funds Management Charter Hall managed funds Office Industrial Retail Social Infrastructure / Other $ 14.1bn $7.6bn $6.9bn $1.8bn Wholesale Equity CPOF CHOT BSWF1 CPIF CLP DVP2 LWHP LWIPs3 CPRF CIB $ 5.6b $ 3.1bn $ 0.6b $ 3.7bn $ 1.8bn $ 13m $ 1.4bn $ 0.6b $ 0.4b $ 0.1bn n n n n C
Slide 35: Office
Appendix – Property Funds Management Office Our business is focussed on creating a true partnership approach to deliver high-quality workplace environments that FUM Properties are productive and provide a better work day experience.” $14.1bn 66 Adrian Taylor Office CEO Occupancy WALE 96.7% 6.9yrs Ca
Slide 36: Industrial
Appendix – Property Funds Management Industrial As one of the largest owners of Industrial and Logistics property in Australia, we go further in collaborating and partnering FUM Properties with our tenant customers to build long- term relationships, and deliver superior $7.6bn 164 returns for our in
Slide 37: Retail
Appendix – Property Funds Management Retail As the leading owner and manager of community convenience Retail and long WALE retail, we are focused on FUM Properties optimising performance for sustainable growth and providing a secure income $6.9bn 178 stream for our investors.” Greg Chubb Retail CEO
Slide 38: Charter Hall Direct
Appendix – Property Funds Management Charter Hall Direct1 Charter Hall Direct is Australia’s leading direct property fund manager, with $5.0 billion of real estate assets under FUM Properties management. We have a strong track record managing unlisted property funds $5.0bn 78 and syndicates since 19
Slide 39: Major wholesale property investment portfolio returns
Appendix - Property Funds Management Major wholesale property investment portfolio returns • The property investment portfolios total property return1 over the five years to 30 June 2019 was 13.3% per annum, outperforming to MSCI/IPD unlisted wholesale property fund index (NAV post fees), which retu
Slide 40: Direct funds net return since inception
Appendix – Property Funds Management Direct funds net return since inception The active Direct Funds have returned 12.2.% p.a out performing the benchmark1 by 2.0% 2 17% 16% 14% 12% 13% 12% 11% 11% 11% 11% 10% 11% 11% 11% 10% 10% 10% 10% 9% 9% DIF2 DIF3 CDC Trust DIF4 BW Trust DAT DAT2 DCSF PFA (Ori
Slide 41: Property Investment
Appendix 6.3 Property Investment Charter Hall Group 2019 Full Year Results 41
Slide 42: Property Investment portfolio
Appendix – Property Investment Property Investment portfolio Ownership stake Charter Hall Charter Hall PI WALE WACR WADR WARR PI Yield3 (%) Investment Income (years) (%) (%) (%) (%) ($m) ($m) Office 671.9 36.8 5.8 5.2% 6.6% 3.8% 6.0% Charter Hall Prime Office Fund (CPOF) 7.1% 291.1 13.4 7.1 5.1% 6.6
Slide 43: Charter Hall Retail REIT (ASX:CQR)
Appendix – Property Investment Charter Hall Retail REIT (ASX:CQR) Key events during FY19 Key metrics1 • Acquired Campbellfield Plaza, Vic for $74 million (settled January 2019), Rockdale Plaza, NSW for $142m (settled April 2019) Gross property assets $3.0bn • Contracted divestments totalling $61 mil
Slide 44: Charter Hall Long WALE REIT (ASX:CLW)
Appendix – Property Investment Charter Hall Long WALE REIT (ASX:CLW) Key events during FY19 Key metrics • Operating EPS and DPS of 26.9 cents, reflecting 2% annual growth on FY18 • NTA per security of $4.09 Gross property assets $2.1bn Total debt (balance sheet) $0.5bn • Total gross property transac
Slide 45: Charter Hall Education Trust (ASX:CQE)
Appendix – Property Investment Charter Hall Education Trust (ASX:CQE) Key events during FY19 Key metrics • Distribution of 16.0 cents per unit (“cpu”), an increase of 6.0% on pcp Gross assets $1.2bn • NTA per unit of $2.96, an increase of 6.5% from $2.78 per unit at 30 June 2018 Total debt $0.3bn •
Slide 46: Charter Hall Prime Office Fund (CPOF)
Appendix – Property Investment Charter Hall Prime Office Fund (CPOF) Key events during FY19 Key metrics • The Fund returned 11.3% for the 12 months to 30 June 2019 Gross property assets $5.6bn • The Fund’s Gross Asset Value (GAV) grew to $5.6bn during the year driven by revaluation uplift of $314.1m
Slide 47: Charter Hall Office Trust (CHOT)
Appendix – Property Investment Charter Hall Office Trust (CHOT) Key events during FY19 Key metrics • CHOT achieved 18.0% equity return for 12 months to 30 Jun 2019 (unit price, pre final performance fee forecast) Gross property assets $3.1bn • Valuations – externally valued at $3.1bn at Jun-19 repre
Slide 48: Charter Hall Prime Industrial Fund (CPIF)
Appendix – Property Investment Charter Hall Prime Industrial Fund (CPIF) Key events during FY19 Key metrics • Acquisition of 12 assets for $372m settled with a combined WALE of 16.0 years improving the Fund’s closing WALE to 10.0 years. The acquisitions strengthen Gross property assets $3.7bn CPIF’s
Slide 49: Core Logistics Partnerships (CLP)
Appendix – Property Investment Core Logistics Partnerships (CLP) Key events during FY19 Key metrics • Acquisition of four assets for $97m settled during the year including the Coles DC at Smeaton Grange NSW, the Coca Cola facility at Kewdale WA (both extensions Gross property assets $1.8bn of existi
Slide 50: Portfolio performance review dates
Additional information Portfolio performance review dates Fund Portfolio Performance Review Dates Charter Hall Office Trust (CHOT) FY20 Core Logistics Partnership (CLP) 7 yearly – FY20 plus individual asset divestment performance fees Charter Hall Direct CDC Trust (CDC) FY20 Charter Hall Direct Indu
Slide 51: Fund key and glossary
Appendix – Property Investment Fund key and glossary Listed entities Direct funds ASX:CHC Charter Hall Group BW Trust BW Trust (Direct syndicate) ASX:CQR Charter Hall Retail REIT CDC Charter Hall Direct CDC Trust DIF2, DIF3, DIF4 Direct Industrial Fund series ASX:CLW Charter Hall Long WALE REIT DOF
Slide 52: Contact information
Appendix – Additional information Contact information David Harrison Sean McMahon Russell Proutt Philip Cheetham Managing Director & Group CEO Chief Investment Officer Chief Financial Officer Head of Listed Investor Relations Charter Hall Group Charter Hall Group Charter Hall Group Charter Hall Grou
Slide 53: Office locations
Sydney Head Office Melbourne Brisbane Perth Adelaide Level 20, No.1 Martin Place Level 14, 570 Bourke Street Level 3, The Annex Level 5, St Georges Square Level 2, 80 Pirie Street Sydney NSW 2000 Melbourne VIC 3000 275 George Street 225 St Georges Terrace Adelaide SA 5000 Brisbane QLD 4000 Perth WA