Slide 1: Full Year Results 30 June 2014
27 August 2014 Charter Hall Group For personal use only Full Year Results 30 June 2014
Slide 2: Agenda
Charter Hall Group Agenda For personal use only David Harrison David Southon Paul Altschwager Joint Managing Director Joint Managing Director Chief Financial Officer 1 Results Summary 2 Property Investments 3 Property Funds Management 4 Financial Results 5 Strategy, Outlook and Guidance 6 Additional
Slide 3: Results Summary
For personal use only Results Summary
Slide 4: Key achievements
Charter Hall Group Key achievements Results summary2 For personal use only Total OEPS and DPS Property Securityholder growth Investment return of of 10.4% yield 7.7% 16.3%1 $3.0bn Australian FUM $1.45bn gross transactions up 15% to equity inflows $1.8bn of acquisitions $1.2bn of divestments $11.5bn
Slide 5: Integrated platform delivers solid earnings growth
Charter Hall Group Integrated platform delivers solid earnings growth Results summary For personal use only • Increase in operating earnings per security (OEPS) to 25.31cps, up 10.4% – Statutory profit after tax of $82.1m, up from $54.8m – Operating earnings of $81.2m, up 18.0% – Distribution of 22.
Slide 6: Earnings composition
Charter Hall Group Earnings composition Results summary For personal use only Operating earnings of $81.2m1, up 18.0% from $68.8m • Property Investments operating earnings growth of 11.7% • Property Funds Management operating earnings growth of 26.6% • Property Investments represents 61% of operatin
Slide 7: Consistent delivery on strategy
Charter Hall Group Consistent delivery on strategy Results summary1 For personal use only ACCESS DEPLOY MANAGE INVEST Access to multiple equity Creating value through Property funds Investing alongside our sources attractive investment management, asset capital partners opportunities management, lea
Slide 8: Total Securityholder Returns
Charter Hall Group Total Securityholder Returns Results summary For personal use only • Total securityholder return for the 12 months to 30 June 2014 : 16.3% • Best performance in A-REIT index over 3 years : 34.0% Distribution per security growth Total performance over 1 and 3 years (% pa) to 30 Jun
Slide 9: Property Investments
For personal use only Property Investments
Slide 10: Property Investment strategy
Charter Hall Group Charter Hall Property Investment strategy Property Investments For personal use only • Charter Hall Group co-invests with capital partners • Property Investment portfolio constructed to optimise Group OEPS and NTA growth INVEST • Targeting long WALE property portfolios leased to q
Slide 11: Group balance sheet
Charter Hall Group Charter Hall Group balance sheet Property Investments For personal use only • Property Investments operating earnings growth of 11.7% • Charter Hall’s Property Investments total $720m, up from $603m at 30 June 2013 • Contributed FY14 operating earnings of $49.7m1, 61% of total ope
Slide 12: Portfolio reweighted
Charter Hall Group Portfolio reweighted Property Investments For personal use only In line with its stated strategy, Charter Hall Group has focused on reweighting its Property Investment portfolio over the last 3 years towards a more diversified portfolio with greater security of income • Diversifie
Slide 13: Portfolio metrics
Charter Hall Group Portfolio metrics Property Investments For personal use only Lease expiry profile1 (30 June 2014) Top 10 tenants (30 June 2014) Tenant % Portfolio leased (By gross income) 60% Wesfarmers subsidiaries 13.5 50% Governments 10.2 Woolworths or subsidiaries 7.4 40% Macquarie Group 5.1
Slide 14: Property Funds Management
Property Funds Management For personal use only
Slide 15: Access, Deploy and Manage
Charter Hall Group Access, Deploy and Manage Property Funds Management For personal use only • Integrated service model with over 350 employees and 5 Australian offices • Investment management Property Funds Management Earnings • fund and portfolio management Drivers 14 40% • transactions • investor
Slide 16: Well diversified funds management portfolio
Charter Hall Group Well diversified funds management portfolio Property Funds Management For personal use only Portfolio Size No. of No. of tenants Gross income WALE Occupancy Average cap rate ($bn) properties ($m) (years) (%) (%) FY14 11.51 2091 2,2893 1,000 7.3 96.8 7.7 FY13 10.3 200 2,968 909 6.1
Slide 17: Office sector activity
Charter Hall Group Office sector activity Property Funds Management For personal use only 12 months to 30 June 2014 • $6.5bn Office funds under management, an increase of 6.6% • Completed 109 leasing agreements across 191,429sqm, increasing office portfolio WALE from 5.1 to 6.2 years • Major leasing
Slide 18: Retail sector activity
Charter Hall Group Retail sector activity Property Funds Management For personal use only 12 months to 30 June 2014 • Total Australian retail FUM has increased by 11.5% to $2.9bn • Total 319 leasing deals over 70,705sqm • Completed 3 retail redevelopments with an on completion value of $217m and sta
Slide 19: Industrial sector activity
Charter Hall Group Industrial sector activity Property Funds Management For personal use only 12 months to 30 June 2014 • Group’s Industrial FUM has grown 82% to $2.1bn • Industrial development pipeline now approximately 368,000sqm with an end value of > $530m • Occupancy remains above 99% and WALE
Slide 20: Australian FUM growth of 15% drives earnings
Charter Hall Group Australian FUM growth of 15% drives earnings Property Funds Management For personal use only • Australian property FUM of $11.5bn up $1.5bn or 15.2% Total Group FUM Australian FUM by Equity Source $14bn Australia FUM Offshore FUM Wholesale Listed Retail $14bn $12bn $11.5 $10.7 $12
Slide 21: Secured inflows across the funds platform
Charter Hall Group Secured inflows across the funds platform Property Funds Management For personal use only • Diversified equity sources • Secured $1.45bn in gross equity flows ($1.0bn net) during FY14 across all equity sources FY12 FY13 FY14 ($m) ($m) ($m) Wholesale Pooled Funds 175 147 651 Wholes
Slide 22: PFM EBITDA growth of 26.1%
Charter Hall Group PFM EBITDA growth of 26.1% Property Funds Management For personal use only • PFM EBITDA margin has increased from 34.1% to 36.2% $M FY14 FY13 Growth Revenue 99.1 83.5 18.7% Net operating expenses (63.2) (55.0) 14.9% $50m 44.7 Property funds management EBITDA1 35.9 28.5 26.1% 39.1
Slide 23: Development adding to fund performance
Charter Hall Group Development adding to fund performance Property Funds Management For personal use only • Redevelopment opportunities undertaken to Development activity On completion value (current projects underway) enhance both income yield and total returns • In-house development skills are a c
Slide 24: Industrial development pipeline
Charter Hall Group Industrial development pipeline Property Funds Management For personal use only • 10 sites nationally totaling approximately 75ha of land • These sites are planned to deliver 368,000sqm of core industrial product worth a total of $530m • Pre-lease conversion during FY14 totaled $1
Slide 25: Property market overview
Charter Hall Group Property market overview Property Funds Management For personal use only Office Total Return by Asset Class • Office sector characterised by rising vacancies, 12 mths (%) to 30 June 14 13.0 benign effective rental growth, however increased 12.1 14 leasing activity and improving le
Slide 26: Financial Result
For personal use only Financial Result
Slide 27: Profit and Loss by segment
Charter Hall Group Profit and Loss by segment Financial result For personal use only $m FY14 FY13(1) Change % • 18.0% growth in Operating Earnings to Direct property investment 1.0 5.0 (79.9%) $81.2m Property funds investment 48.7 39.5 23.3% • Property investment operating earnings up Total property
Slide 28: Property Investments earnings growth of 11.7%
Charter Hall Group Property Investments earnings growth of 11.7% Financial result For personal use only • Operating earnings from property investments up 11.7% to $49.7m – 3.8% like for like1 earnings growth driven by improved leasing performance and reduced borrowing costs in CPIF and CHOT – $9.7m
Slide 29: Property Funds Management earnings up 26.6%
Charter Hall Group Property Funds Management earnings up 26.6% Financial result For personal use only • PFM operating earnings up 26.6% to $34.6m $m FY14 FY13 Change % • PFM EBITDA margin has expanded by 2.1% to Investment management 44.7 39.1 14.3% 36.2% Property management 14.3 12.7 13.0% • Revenu
Slide 30: Balance Sheet Capacity
Charter Hall Group Balance Sheet Capacity Financial result For personal use only • Strong balance sheet maintained $m 30 June 14 30 June 13 – Continued capital recycling of $86m Cash 50.2 12.2 Property Investments 719.8 603.0 – $161m of new equity raised on FY14 Development investments 47.2 59.7 • P
Slide 31: Cashflow
Charter Hall Group Cashflow Financial result For personal use only Operating Earnings to Operating Cashflow • Operating cashflow exceeds both earnings $3.8m $3.0m ($5.3m) $3.1m $1.6m (107%) and distribution (119%) • Fund distributions are based on fund $87.3m specific investment mandates. Distributi
Slide 32: Capital management
Charter Hall Group Capital management Significant managed funds debt platform For personal use only • Substantial funding capacity available Key Debt Metrics across the Group Managed Funds Platform Jun-14 Jun-13 Facility Limit ($m) (1) 5,485 4,880 – $5.5bn of debt facilities across 22 funds Drawn De
Slide 33: Strategy, Outlook and Guidance
Strategy, Outlook and Guidance For personal use only
Slide 34: Strategy
Charter Hall Group Strategy Strategy outlook and guidance For personal use only Strategy • Continuing to deliver strong fund performance for our investors • Securing quality assets within our core property sectors • Active management of our property portfolio • Investing alongside capital partners •
Slide 35: Chairman retirement and new appointment
Charter Hall Group Chairman retirement and new appointment For personal use only • Chairman, Kerry Roxburgh has advised of his intention to retire at the Annual General Meeting scheduled for 12 November 2014 • Kerry has chaired the Group during its first decade as an AREIT, in which time core FUM ha
Slide 36: FY15 outlook and earnings guidance
Charter Hall Group FY15 outlook and earnings guidance Strategy outlook and guidance For personal use only • Australian property income to debt spreads remain attractive for domestic and offshore investors • Charter Hall continues to focus on investing in assets with strong tenant covenants and long
Slide 37: Additional Information
Additional Information For personal use only
Slide 38: Additional information
Charter Hall Group Additional information For personal use only Section Slide 1 Group overview and strategy 38 2 Property funds management platform 39 3 Property investment portfolio 41 4 Fund updates 43 5 Financial information 48 6 Capital management and funding 53 7 Fund key 56 Charter Hall Group
Slide 39: Group overview
Charter Hall Group Charter Hall Group Group overview For personal use only Property Funds Management platform $11.5bn FUM 30 Jun 2014 • Asset management • Investment management FUM $11.5bn • Property management • Transaction services No. of properties 209 • Development management • Capital managemen
Slide 40: Managed funds
Charter Hall Group Charter Hall managed funds FUM as at 30 June 2014 For personal use only Listed AREIT Wholesale Pooled funds, Partnerships and Mandates Retail investor funds Funds being realised $2.0bn $7.8bn $1.6bn $0.1bn ($129m co-invested) ($555m co-invested) ($33m co-invested) ($22m equity to
Slide 41: Managed funds
Charter Hall Group Charter Hall managed funds As at 30 June 2014 For personal use only 1 1 Total Sector Equity Source No. of Lettable area Occupancy Weighted WALE Weighted property Properties (Sqm) average rent average cap assets ($m) review rate (in years) Top 5 Managed Funds CQR 1,989 Retail Liste
Slide 42: CHC Property investment portfolio
Charter Hall Group CHC Property investment portfolio As at 30 June 2014 For personal use only Ownership Stake Charter Hall Charter Hall Investment WALE Market Cap Discount Rate Minimum Charter Hall Investment Income Rate rental reviews Investment Yield (30 June 14) (30 June 14) (FY14) (FY14) (%) ($m
Slide 43: Property Investment geographic breakdown
Charter Hall Group Property Investment geographic breakdown Charter Hall Group balance sheet For personal use only WA 12% Tas 1% ACT 2% SA 3% NSW 44% VIC 22% QLD 16% Charter Hall Group / Full Year results 30 June 2014 42
Slide 44: Office Trust (CHOT)
Charter Hall Group Charter Hall Office Trust (CHOT) Property investment portfolio For personal use only Key events during FY14 Portfolio characteristics Key metrics • Total leasing of 87,516sqm, including leases with QBE and Gross property assets $2.32bn Unilever at 2 Park St, Sydney; APRA, LinkedIn
Slide 45: Retail REIT (CQR)
Charter Hall Group Charter Hall Retail REIT (CQR) Property investment portfolio For personal use only Key events during FY14 Portfolio characteristics 1 Key metrics2 • Acquired four properties for $252.4m at average initial Gross property assets $2.0bn yield of 7.6% (including Coomera post balance d
Slide 46: Core Plus Office Fund (CPOF)
Charter Hall Group Core Plus Office Fund (CPOF) Property Investment portfolio For personal use only Key events during FY14 Portfolio characteristics3 Key metrics 2 • $234m net equity raising increasing the total contributed equity Gross property assets $2.1bn Total debt $787m since inception to $1.2
Slide 47: Core Logistics Partnership (CLP)
Charter Hall Group Core Logistics Partnership (CLP) Property investment portfolio For personal use only Key events during FY14 Portfolio characteristics 1 Key metrics • 7 assets of 13 in portfolio acquired during FY14 (54% GAV) Gross property assets $608m Total debt $111m • Developments at Truganina
Slide 48: Core Plus Industrial Fund (CPIF)
Charter Hall Group Core Plus Industrial Fund (CPIF) Property investment portfolio For personal use only Key events during FY14 Portfolio characteristics 1 Key metrics • CPIF ranked as Australia’s strongest performing unlisted wholesale Gross property assets 2 $907m fund (all sectors) over the 3 year
Slide 49: Key financial metrics
Charter Hall Group Key financial metrics Financial performance overview For personal use only GROUP FY14 FY13 Change Statutory profit after tax $82.1m $54.8m 49.8% Operating earnings1 $81.2m $68.8m 18.0% Operating earnings per security (OEPS)1 25.31cps 22.93cps 10.4% Distribution per security (DPS)
Slide 50: Capital recycling program substantially completed
Charter Hall Group Capital recycling program substantially completed Capital management of the Charter Hall investment portfolio For personal use only CHC capital recycled ($m) FY12 FY13 FY14 Total We recycle our capital to seed additional high value Equity realised opportunities for Charter Hall an
Slide 51: Detailed operating earnings
Charter Hall Group Detailed operating earnings For personal use only FY14 FY13 Variance % ($000s) ($000s) ($000s) Direct Property Investment Direct Property Investment Income 1,018 9,101 (8,083) (88.8%) Interest Expense (44) (2,289) 2,245 98.1% Non-controlling Interest - (1,613) 1,613 100.0% Operati
Slide 52: Property funds management operating earnings
Charter Hall Group Property funds management operating earnings For personal use only FY14 FY13 Variance % ($000s) ($000s) ($000s) Revenue Investment management fees 44,725 39,123 5,602 14.3% Property management fees 14,345 12,699 1,646 13.0% Transaction and performance fees 16,150 10,472 5,678 54.2
Slide 53: Reconciliation of operating earnings to statutory profit after tax
Charter Hall Group Reconciliation of operating earnings to statutory profit after tax For personal use only FY14 FY13 $000s $000s Operating Earnings 81,163 68,750 Fair value adjustments on derivatives1 (909) 1,472 Fair value adjustment on investments and property1 14,404 (3,615) Amortisation of mana
Slide 54: Group and managed funds debt summary
Charter Hall Group Group and managed funds debt summary Six largest funds CHC has direct ownership interest For personal use only • The 6 largest managed funds that CHC has a direct Debt Summary investment comprise 83% of total property investment CHC CHOT CPOF CQR CPIF CLP CHDPF • Group wide debt p
Slide 55: Debt maturity profile
Charter Hall Group Debt maturity profile Group debt maturity profile extended to 3.6 years For personal use only • Weighted average maturity at 30 June 2014 is 3.6 years up • Look through weighted average maturity at 30 June 2014 is from 3.1 years at 30 June 2013 3.3 years • CHC corporate debt facil
Slide 56: Interest rate risk management
Charter Hall Group Interest rate risk management FY15 look through interest rate exposure hedged to 71% For personal use only • The hedge portfolio has a duration of 3.5 years1 • The passing weighted average hedge rate is 3.8%1 • The passing weighted average cost of debt is 5.1%1 1. Interest rate he
Slide 57: Fund Key
Charter Hall Group Fund Key For personal use only Listed entities Funds being realised CHC Charter Hall Group DPF Diversified Property Fund CQR Charter Hall Retail REIT CHOF5 Charter Hall Opportunity Fund 5 Wholesale (Pooled and Partnerships) CHUF Charter Hall Umbrella Fund CPOF Core Plus Office Fun
Slide 58: Disclaimer
Disclaimer For personal use only This presentation has been prepared by Charter Hall Group (being Charter Hall Limited (ABN 57 113 531 150) and Charter Hall Funds Management Limited (ABN 31 082 991 786) (AFSL 262861) as the responsible entity for Charter Hall Property Trust (ARSN 113 339 147)) (the
Slide 59: Further information
Charter Hall Group Further information For personal use only David Harrison David Southon Joint Managing Director Joint Managing Director +61 2 8651 9142 +61 2 8651 9143 david.harrison@charterhall.com.au david.southon@charterhall.com.au Paul Altschwager Kylie Ramsden Chief Financial Officer Head of
Slide 60: For personal use only
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