Charter Hall Group · ASX:CHC
Charter Hall — Investor Day (June 2019)
80 slides from Charter Hall's investor day presentation, Jun 11, 2019
Slide 1: Charter Hall Group Development Showcase
For personal use only CHARTER HALL GROUP DEVELOPMENT SHOWCASE SYDNEY 11 JUNE 2019
Slide 2: Agenda
Charter Hall | 2019 Development Showcase Agenda For personal use only 1. Welcome and Housekeeping Philip Cheetham, Head of Investor Relations 2. Charter Hall Research View Sasanka Liyanage, National Research Manager 3. Pre-Leased Transactions Mark Harrison, Head of Capital Transactions 4. Office Dev
Slide 3: Welcome and Housekeeping
Charter Hall | Welcome and Housekeeping Philip Cheetham, Head of Listed Investor Relations For personal use only 555 Collins Street, Melbourne NSW (Artist’s impression)
Slide 4: Research View
Charter Hall | Charter Hall Research View Sasanka Liyanage, National Research Manager For personal use only Chullora Logistics Park, 2 Hume Highway, Chullora NSW
Slide 5: Office national market balance
Charter Hall | 2019 Development Showcase Office national market balance National CBD For personal use only Vacancy, net supply and net absorption sqm Vacancy (%) 700,000 14.0% 600,000 12.0% 500,000 10.0% 400,000 300,000 8.0% 200,000 6.0% 100,000 - 4.0% -100,000 2.0% -200,000 -300,000 0.0% 2007 2008
Slide 6: Office Sydney & Melbourne market balance
Charter Hall | 2019 Development Showcase Office Sydney & Melbourne market balance Sydney Melbourne For personal use only Vacancy, supply and withdrawals Vacancy, net supply and net absorption sqm Vacancy (%) sqm Vacancy (%) 300,000 12.0% 250,000 12.0% 250,000 200,000 10.0% 10.0% 200,000 150,000 150,
Slide 7: Office major market rental differentials
Charter Hall | 2019 Development Showcase Office major market rental differentials Indicative net face rent For personal use only $/sqm p.a. $1,200 $1,141 $1,024 $1,000 $842 $800 $787 $689 $612 $621 $600 $602 $580 $537 $523 $504 $500 $477 $438 $435 $400 $388 $395 $375 $308 $255 $200 $0 Sydney CBD Nor
Slide 8: Above trend industrial demand
Charter Hall | 2019 Development Showcase Above trend industrial demand Strong occupier demand activity coupled with steady supply For personal use only Occupier demand above historical averages Supply in line with long-term averages Industrial gross take-up National industrial construction Gross tak
Slide 9: Above trend industrial demand: rental growth
Charter Hall | 2019 Development Showcase Above trend industrial demand Strong rental growth emerges from increased demand For personal use only Lower availabilities of vacant space drive rental growth Broad-based rental growth nationally National weighted prime rental growth Annual prime rental grow
Slide 10: Industrial construction snapshot
Charter Hall | 2019 Development Showcase Industrial construction snapshot Robust construction activity in the Sydney and Melbourne markets For personal use only Supply (sqm Supply (sqm millions) SYDNEY millions) MELBOURNE 1.2 0.9 0.8 1.0 0.7 0.8 0.6 0.5 0.6 0.4 0.4 0.3 0.2 0.2 0.1 0.0 0.0 2007 2008
Slide 11: Industrial land value growth accelerates
Charter Hall | 2019 Development Showcase Industrial land value growth accelerates Increased industrial demand and development generates land value growth For personal use only Sydney and Melbourne land value growth Annualised Growth (serviced land) (%) • A shortage of serviced land and increased 50%
Slide 12: Pre-Leased Transactions
Charter Hall | Pre-Leased Transactions Mark Harrison, Head of Capital Transactions For personal use only Dandenong Distribution Centre, 225 Glasscocks Road, Dandenong South VIC
Slide 13: Office transactions - commercial pre-commitment sales
Charter Hall | 2019 Development Showcase Office transactions - commercial pre-commitment sales For personal use only Overview Pre-Commitment Take-Up • Pre-committed market transactions are generally offered through either a Fund 500,000 Through or Takeout structure. The asset is either partial or fu
Slide 14: Office transactions - commercial pre-commitment sales
Charter Hall | 2019 Development Showcase Office transactions - commercial pre-commitment sales For personal use only 1 Esplanade, 118 Mount Street, 183 – 185 Clarence 275 George Street, 80 Ann Street, Quay Quarter Tower, Wynyard Place, 105 Phillip Street, Perth WA North Sydney NSW Street, Sydney NSW
Slide 15: Industrial national pre-commitment market
Charter Hall | 2019 Development Showcase Industrial national pre-commitment market Leasing Overview For personal use only • Since 2016 there has been circa 8,000,000 sqm of take up nationally • This has been recorded across 694 major leasing transactions • Nationally 49% of the industrial leasing ma
Slide 16: Industrial market transaction – case study
Charter Hall | 2019 Development Showcase Industrial market transaction – case study For personal use only Mainfreight Distribution Centre, Prestons NSW Financial Metrics • Off-market secured pre-leased prime logistics facility fully leased to Mainfreight Purchase Price $76,500,000 Distribution Pty L
Slide 17: Office Development Update
Charter Hall | Office Development Update For personal use only 555 Collilns Street, Melbourne VIC (Artist’s impression)
Slide 18: Portfolio overview
Charter Hall | 2019 Development Showcase Portfolio overview A leader in prime office development For personal use only The Charter Hall Office Development portfolio comprises approximately $4.68b of development pipeline, including $1.7b of committed projects and a further $2.97b of un committed deve
Slide 19: Portfolio overview
Charter Hall | 2019 Development Showcase Portfolio overview Strong portfolio of high-quality office developments-committed and un committed For personal use only 19
Slide 20: Pillars of strategic growth
Charter Hall | 2019 Development Showcase Pillars of strategic growth For personal use only 1. Add Value 2. Masterplan Strategic 3. Originate Existing Portfolio Acquisitions • Master-plan • Assist Transaction teams to • Focus on: • Identify strategic adjoining land identify value creation inherent -
Slide 21: High performance workplace
Charter Hall | 2019 Development Showcase High performance workplace Delivering best in class workplace environments For personal use only LEADING DESIGN SUSTAINABILITY COMMUNITY FOCUS CONNECTED SPACES RETAIL AMENITY TECHNOLOGY ENABLES 21
Slide 22: Lonsdale Street, Melbourne VIC
Charter Hall | 2019 Development Showcase 130 Lonsdale Street, Melbourne VIC Urban regeneration in the heart of Melbourne’s CBD For personal use only Original DA approval April 2016 Charter Hall DA approval February 2017 22
Slide 23: Lonsdale Street, Melbourne VIC
Charter Hall | 2019 Development Showcase 130 Lonsdale Street, Melbourne VIC Urban regeneration in the heard of Melbourne’s CBD For personal use only LITTLE LONSDALE STREET 1 130 Lonsdale Street 4 4 2 Manse 3 8 8 5 3 Town Square 5 3 4 Caretaker’s Cottage 5 School House 9 2 9 2 6 Nicholas Hall HAYWARD
Slide 24: Lonsdale Street, Melbourne VIC
Charter Hall | 2019 Development Showcase 130 Lonsdale Street, Melbourne VIC Urban regeneration in the heart of Melbourne’s CBD For personal use only WESLEY PLACE PRECINCT 130 Lonsdale Street 58,000 sqm Precinct Retail 3,500sqm GLAR 140 Lonsdale Street 22,500 sqm 150 Lonsdale Street 30,000 sqm Precin
Slide 25: Lonsdale Street, Melbourne VIC
Charter Hall | 2019 Development Showcase 130 Lonsdale Street, Melbourne VIC Urban regeneration in the heard of Melbourne’s CBD For personal use only Overview Start date October 2017 Target completion April 2020 On completion forecast ($AUD) $700 million + Grade PCA premium Ownership 100% CPOF Total
Slide 26: GPO Exchange, Adelaide SA
Charter Hall | 2019 Development Showcase GPO Exchange, Adelaide SA Setting a new standard for workplace For personal use only 26
Slide 27: GPO Exchange, Adelaide SA
Charter Hall | 2019 Development Showcase GPO Exchange, Adelaide SA Setting a new standard for workplace For personal use only 27
Slide 28: GPO Exchange, Adelaide SA
Charter Hall | 2019 Development Showcase GPO Exchange, Adelaide SA Setting a new standard for workplace For personal use only Overview Start date August 2017 Target completion September 2019 On completion forecast ($AUD) $250 million + Grade PCA A-Grade Ownership 100% CPOF Total NLA (sqm) 25,500 Typ
Slide 29: Collins Street, Melbourne VIC
Charter Hall | 2019 Development Showcase 555 Collins Street, Melbourne VIC A natural way of working For personal use only 29
Slide 30: Collins Street, Melbourne VIC
Charter Hall | 2019 Development Showcase 555 Collins Street, Melbourne VIC A natural way of working For personal use only Global benchmarking study tour 30
Slide 31: Collins Street, Melbourne VIC
Charter Hall | 2019 Development Showcase 555 Collins Street, Melbourne VIC A natural way of working For personal use only Market: Historically low vacancy rate of 3.7% Development Program: • 555 Site Acquired in October 2018 by CPOF • Development Approval: - DA lodged April 2018 - Forecast DA Approv
Slide 32: Collins Street, Melbourne VIC
Charter Hall | 2019 Development Showcase 555 Collins Street, Melbourne VIC A natural way of working For personal use only Overview Start date Demolition commenced May 2019 Target completion Mid 2022 On completion forecast ($AUD) $1.5 billion + Grade Premium Ownership 100% CPOF Total NLA (sqm) 80,000
Slide 33: Queen Street, Brisbane QLD
Charter Hall | 2019 Development Showcase 360 Queen Street, Brisbane QLD Brisbane’s new centrepiece For personal use only Overview Start date 2019 Target completion 2022 – 2023 (forecast) On completion forecast $550 million + ($AUD) Grade Premium 50% CPOF Ownership 50% ICPF Total NLA (sqm) 39,000 Typ
Slide 34: Completed projects George Street, Brisbane CBD
Charter Hall | 2019 Development Showcase Completed projects 275 George Street, Brisbane CBD For personal use only Overview Completed 2007 Current Value ($AUD) $461,100,000 (as at Dec 2018) Grade A 50% CPOF Ownership 50% CHOF 4 then sold to Keppel REIT Total NLA (sqm) 41,749 Typical floor plate (sqm)
Slide 35: Completed projects Skyring Terrace, Brisbane CBD Fringe
Charter Hall | 2019 Development Showcase Completed projects 100 Skyring Terrace, Brisbane CBD Fringe For personal use only Overview Completed 2014 Current Value ($AUD) $250,000,000 (sale price Nov 2018) Grade A Ownership CPOF & DOF- sold 2018 Total NLA (sqm) 24,665 Typical floor plate (sqm) 2,200 Ba
Slide 36: Completed projects Raine Square Retail Redevelopment
Charter Hall | 2019 Development Showcase Completed projects Raine Square Retail Redevelopment, 300 Murray Street, Perth WA For personal use only Overview Construction 2017 Commencement Date Completion Date Final Stage Completed December 2018 Value as at Dec 2018 $158.5 million (Retail) ($AUD) Create
Slide 37: Higher education strategy
Charter Hall | 2019 Development Showcase Higher education strategy Creating universities of the future For personal use only Key Market Stats • Education is Australia’s largest service export and our third largest overall export • $20.3 billion annual spend on education fees and related goods and se
Slide 38: Parramatta Square (1PSQ), Parramatta NSW
Charter Hall | 2019 Development Showcase 1 Parramatta Square (1PSQ), Parramatta NSW One Parramatta Square: A new city centre For personal use only Overview Date started 2014 Date completed 2016 On completion value ($AUD) $252.5 million Grade A 50% - Charter Hall DOF Ownership 50% - Charter Hall CPOF
Slide 39: Hassall Street, Parramatta NSW
Charter Hall | 2019 Development Showcase 6 Hassall Street, Parramatta NSW Engineering business success For personal use only Overview Start date 2019 Target completion 2021 (forecast) On completion forecast ($AUD) $280 million + Grade A 50% DOF Ownership 50%-WSU Total NLA (sqm) 28,800 Typical floor
Slide 40: Office development track record
Charter Hall | 2019 Development Showcase Office development track record A leader in prime office development For personal use only 40
Slide 41: Industrial Development Update
Charter Hall | Industrial Development Update For personal use only Chullora Logistics Park, 2 Hume Highway, Chullora NSW
Slide 42: Development pipeline
Charter Hall | 2019 Development Showcase Development pipeline Charter Hall continues to drive asset creation through development For personal use only • Our build to hold strategy is to identify and purchase well located Industrial land for the Funds (in key markets) and then secure pre-leases with
Slide 43: Cross-sector collaboration to leverage opportunities
Charter Hall | 2019 Development Showcase Cross-sector collaboration to leverage opportunities Customer case studies For personal use only Industrial Office Retail Industrial Industrial Industrial • 2017 - Relationship established • Mutual desire and aim to grow the • Leveraging customer relationship
Slide 44: Chullora Logistics Park case study
Charter Hall | 2019 Development Showcase Industrial development case study Chullora Logistics Park – 2 Hume Highway, Chullora NSW For personal use only 44
Slide 45: Chullora Logistics Park – 2 Hume Highway, Chullora NSW
Charter Hall | 2019 Development Showcase Industrial development case study Chullora Logistics Park – 2 Hume Highway, Chullora NSW For personal use only Overview Site Area 10.3ha On-completion GLA 46,850sqm On-completion GAV $167 million ($AUD) Ownership 100% CPIF WALE >12 years on completion • Lion
Slide 46: M5/M7 Logistics Park case study
Charter Hall | 2019 Development Showcase Industrial development case study M5/M7 Logistics Park – 290 Kurrajong Road, Prestons NSW For personal use only 46
Slide 47: M5/M7 Logistics Park – 90 Kurrajong Road, Prestons NSW
Charter Hall | 2019 Development Showcase Industrial development case study M5/M7 Logistics Park – 290 Kurrajong Road, Prestons NSW For personal use only Overview Site Area 14.1ha On-completion GLA 84,000sqm On-completion forecast $185 million ($AUD) Ownership 100% CPIF • Bracknells Warehousing & Dis
Slide 48: Motorway Industrial Park case study
Charter Hall | 2019 Development Showcase Industrial development case study Motorway Industrial Park – Gilmore Road, Berrinba QLD For personal use only 48
Slide 49: Motorway Industrial Park – Gilmore Road, Berrinba QLD
Charter Hall | 2019 Development Showcase Industrial development case study Motorway Industrial Park – Gilmore Road, Berrinba QLD For personal use only Overview Site Area 18.1ha On-completion GLA ~97,000sqm On-completion GAV ($AUD) ~$170 million Ownership CPIF • Mitre 10 (Metcash) Tenant Mix • QLS •
Slide 50: Drystone Industrial Estate case study
Charter Hall | 2019 Development Showcase Industrial development case study Drystone Industrial Estate – 441 Doherty’s Road, Truganina Melbourne VIC For personal use only 50
Slide 51: Drystone Industrial Estate – Truganina Melbourne VIC
Charter Hall | 2019 Development Showcase Industrial development case study Drystone Industrial Estate – 441 Doherty’s Road, Truganina Melbourne VIC For personal use only Overview Site Area 70ha (NDA) On-completion GLA 350,000sqm On-completion forecast $659 million ($AUD) Ownership 100% CLP Woolworth
Slide 52: Midwest Industrial Estate case study
Charter Hall | 2019 Development Showcase Investment development case study Midwest Industrial Estate – 500 Doherty’s Road, Truganina, Melbourne VIC For personal use only 52
Slide 53: Midwest Industrial Estate – Truganina, Melbourne VIC
Charter Hall | 2019 Development Showcase Investment development case study Midwest Industrial Estate – 500 Doherty’s Road, Truganina, Melbourne VIC For personal use only Overview Site Area 47ha On-completion GLA 265,000sqm On-completion forecast GAV $345m Ownership 100% CPIF • 45,000sqm pre-commitme
Slide 54: Automation – Driving change
Charter Hall | 2019 Development Showcase Automation – Driving change Woolworths Distribution centre, Dandenong VIC For personal use only • Alongside our partners Woolworths Group, we're proud winners of the Property Council of Australia's 2019 Development Innovation Award for our Woolworths state of
Slide 55: Automation & E-commerce
Charter Hall | 2019 Development Showcase Automation & E-commerce Changing customer requirements For personal use only Woolworths Melbourne South Regional Distribution Centre (Dandenong, VIC) • 69,217 sqm facility servicing Victorian stores • Incorporating multiple automation technologies - 40m high
Slide 56: Diversified Development Update
Charter Hall | Diversified Development Update Ben Dodwell, Head of Diversified Development For personal use only Novotel Sydney International Airport, 22 Levey Street, Wolli Creek NSW
Slide 57: Millers Junction Retail
Charter Hall | Millers Junction Retail 290 Millers Road, Altona North VIC For personal use only
Slide 58: Master plan
Charter Hall | 2019 Development Showcase Master plan For personal use only 58
Slide 59: Millers Junction Retail Site plan
Charter Hall | 2019 Development Showcase Millers Junction Retail Site plan For personal use only Food Traditional Retail Large Format Supermarket Centre Leisure / (including Medical / (Woolworths + Entertainment Homewares / Discount Retail) 500sqm Specialty Retail) Food Retail Future Stage 59
Slide 60: Millers Junction Retail Key metrics
Charter Hall | 2019 Development Showcase Millers Junction Retail Key metrics For personal use only Tenants GLA % (#) (sqm) of GLA Woolworths (incl. BWS) 1 3,921 29.3 Leisure / Entertainment 1 3,000 22.4 Large format retail 5 5,330 39.8 Fast food 5 634 4.7 Specialty retail 6 497 3.7 Total 20 13,382 R
Slide 61: Novotel Sydney International Airport
Charter Hall | Novotel Sydney International Airport 22 Levey Street, Wolli Creek NSW For personal use only
Slide 62: Novotel Sydney Airport Hotel
Charter Hall | 2019 Development Showcase Novotel Sydney Airport Hotel Key Metrics For personal use only • Owned by Charter Hall Direct Sydney Airport Fund • 271 room hotel in close proximity to the Sydney International Airport • Re-branded to Novotel (previously Mercure) in April 2019, new restauran
Slide 63: Hotel refurbishment
Charter Hall | 2019 Development Showcase Hotel refurbishment For personal use only BEFORE AFTER 63
Slide 64: Hotel refurbishment
Charter Hall | 2019 Development Showcase Hotel refurbishment For personal use only BEFORE AFTER 64
Slide 65: Hornsby Town Centre
Charter Hall | Hornsby Town Centre Hornsby NSW For personal use only
Slide 66: Hornsby Town Centre: Where are we up to?
Charter Hall | 2019 Development Showcase Hornsby Town Centre Where are we up to? For personal use only • December 2014 Charter Hall (Folkestone) approves site consolidation strategy • Options used to secure 2 properties (~2,400sqm) on deferred terms, freehold acquisitions of 2 properties (~790sqm) s
Slide 67: Hornsby rail station pedestrian movements
For personal use only Charter Hall | 2019 Development Showcase western suburbs, Hornsby is the only one in the north Major Retail Interchange • Majority of the developable rail stations are in the south and 0 10,000 20,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000 30,000 Parramatta Station N
Slide 68: Hornsby East-side Properties Owned / Optioned
Charter Hall | 2019 Development Showcase Hornsby East-side Properties Owned / Optioned For personal use only 68
Slide 69: Hornsby Town Centre East and West-side
Charter Hall | 2019 Development Showcase Hornsby Town Centre East and West-side For personal use only • West-side up stamped to 25 storeys at “Gateway” • West-side new buildings will vary between 8, 12, 15 and 20 storeys in height, while there will be one iconic site permitted at a maximum of 25 sto
Slide 70: Advantage
Charter Hall | Charter Hall Advantage David Harrison, Managing Director & Group CEO For personal use only GPO Exchange, Adelaide, SA (Artist’s impression)
Slide 71: Retail and Industrial are converging
Charter Hall | 2019 Development Showcase Retail and Industrial are converging The line between retail and industrial continues to blur For personal use only This blur has had the benefit of enabling CHC greater retail / industrial cross-sector opportunities with major customers 71
Slide 72: Market penetration – Sydney, NSW
Charter Hall | 2019 Development Showcase Market penetration – Sydney, NSW For personal use only NSW FUM ($bn) No. Assets Office 6.3 19 Retail 3.0 50 Industrial 1.9 49 Social Infrastructure 0.2 91 Other 0.1 2 Total 11.6 211 72
Slide 73: Market Penetration – Melbourne, VIC
Charter Hall | 2019 Development Showcase Market Penetration – Melbourne, VIC For personal use only VIC FUM ($bn) No. Assets Office 2.4 14 Retail 1.0 30 Industrial 2.5 44 Social Infrastructure 0.4 102 Other 0.1 1 Total 6.3 191 73
Slide 74: Market Penetration – Brisbane, QLD
Charter Hall | 2019 Development Showcase Market Penetration – Brisbane, QLD For personal use only QLD FUM ($bn) No. Assets Office 2.9 17 Retail 1.3 51 Industrial 1.0 29 Social Infrastructure 0.3 131 Total 5.6 228 74
Slide 75: Industrial/Retail cross-sector tenant relationships
Charter Hall | 2019 Development Showcase Industrial/Retail cross-sector tenant relationships Charter Hall’s industrial/retail cross-sector customer relationships continue to prove a strategic advantage For personal use only to growth • Retail tenant relationships have proven highly valuable in the i
Slide 76: Multi sector relationships
Charter Hall | 2019 Development Showcase Multi sector relationships For personal use only Top 20 Charter Hall Group Customers Top 20 Charter Hall Industrial Customers Benefiting from Charter Hall’s customer engagement across sectors Woolworths Coles 9.6% Aust. Gov't Woolworths 8.9% • Customer cross-
Slide 77: Global real estate performance 2018
Charter Hall | 2019 Development Showcase Global real estate performance 2018 Globally, retail has been experiencing significantly weaker growth and returns For personal use only • Globally, total returns for retail were just ~4% in stark contrast to office (~8%) and industrial (~14%) returns – Story
Slide 78: Development contributing to performance
Charter Hall | 2019 Development Showcase Development contributing to performance CPOF & CPIF outperformance aided by development contribution For personal use only $bn Legend 6.0 Asset Acquisition 5.5 Asset Disposal GAV 5.0 NTA plus Developed to Core 4.5 distributions 4.0 Committed Development Creat
Slide 79: Contact information
Charter Hall | 2019 Development Showcase Contact information For personal use only David Harrison Philip Cheetham Managing Director & Group CEO Head of Listed Investor Relations Charter Hall Group Charter Hall Group T: +61 2 8651 9142 T: +61 2 8651 9214 E: david.harrison@charterhall.com.au E: philip
Slide 80: Sydney Head Office
Sydney Head Office Level 20, No.1 Martin Place, Sydney, NSW, 2000 T: +61 2 8651 9000 For personal use only