Charter Hall Retail Reit · ASX:CQR
Charter Hall Retail Reit — Bank of America Merrill Lynch Global Real Estate & Australian Investment Conference 2013
40 slides from Charter Hall Retail Reit's conference presentation, Sep 13, 2013
Slide 1: Charter Hall Retail REIT
11-13 September 2013 Charter Hall Retail REIT Bank of America Merrill Lynch Global Real Estate & Australian Investment Conference
Slide 2: Contents
Charter Hall Retail REIT Contents Scott Dundas Phil Schretzmeyer Fund Manager Deputy Fund Manager 1 Full Year Results 2 Portfolio Investments 3 Australian Operational Performance 4 Financial Performance 5 Strategy and Outlook 1
Slide 3: Charter Hall Retail REIT
Charter Hall Retail REIT Charter Hall Retail REIT • Charter Hall Retail REIT (ASX:CQR) invests in a portfolio of predominantly Australian high quality supermarket anchored neighbourhood and sub-regional shopping centres • Listed in 1995 as Countrywide Property Trust • Geographically diverse portfoli
Slide 4: Full Year Results
Full Year Results
Slide 5: Full Year Results
Charter Hall Retail REIT Full Year Results Year ended 30 June 2013 Key metrics FY13 FY12 Movement Statutory profit $52.6m $9.7m +442.3% Statutory profit per unit 16.24 cents 3.24 cents +401.2% Operating earnings1 $96.4m $86.3m +11.7% Operating earnings per unit 29.77 cents 28.81 cents +3.3% Distribu
Slide 6: Highlights
Charter Hall Retail REIT Highlights Year ended 30 June 2013 Strategy Achievements Growing the Australian • Acquired three properties for $101 million at average initial yield of 9.6% business • Post balance date acquired Secret Harbour shopping centre for $33.2 million • $62 million Singleton Square
Slide 7: Portfolio Investments
Portfolio Investments
Slide 8: Revaluations
Charter Hall Retail REIT Revaluations Australian supermarket anchored Six months to Jun 2013 Freestanders Neighbourhood Sub-regional Total Number of properties 19 41 14 74 June 2013 valuation (A$m) 184.1 878.8 594.7 1,657.6 Prior book value1 (A$m) 182.4 883.5 590.3 1,656.2 Movement in book value (A$
Slide 9: Australian Acquisitions
Charter Hall Retail REIT Australian Acquisitions Disciplined investment strategy Average CQR’s Strategy Typical Occupancy Typical GLA Typical Characteristics Anchor Tenants Cost • Neighbourhood and Supermarket and Woolworths 11.9% sub-regional Neighbourhood < 10,000 sqm approx. 35 specialty Coles su
Slide 10: Australian Acquisitions
Charter Hall Retail REIT Australian Acquisitions Completed acquisitions Price $m Yield Settlement Tamworth, NSW 35.0 10.1% Oct 2012 Lake Macquarie & Mount Hutton, NSW1 35.2 8.6% Oct 2012 Dubbo, NSW 30.5 10.2% Nov 2012 Secret Harbour, WA 33.2 7.8%2 Jul 2013 Total 133.9 Secret Harbour, WA Tamworth, NS
Slide 11: Australian Operational Performance
Australian Operational Performance
Slide 12: Australian Portfolio
Charter Hall Retail REIT Australian Portfolio Summary • Australian portfolio continued to deliver robust results over FY13 • Specialty rent growth of 3.1%: – 2.4% on 63 new leases (124 non-comparable leasing deals) – 3.5% on 139 renewals • Positive releasing spreads reflect sustainable occupancy cos
Slide 13: Australian Portfolio: Anchor tenants
Charter Hall Retail REIT Australian Portfolio Anchor tenants Turnover rent and sales performance Portfolio composition 10% Comparable food & liquor sales growth Top 5 tenants by annual base rent 9% 8% Full year sales at June 13 = A$28.1bn Woolworths Woolworths Ltd, 29.3% 7% 6% 5% Coles Wesfarmers, 2
Slide 14: Australian Portfolio: Specialty tenants
Charter Hall Retail REIT Australian Portfolio Specialty tenants Summary by % of ABR Occupancy Sales Specialty occupancy cost of 8.9% Category Cost1 Growth1 • Average specialty gross rent $737/sqm Services 8% 11.3% 1.3% • Sales productivity of $8,246/sqm Food catering 7% 11.3% 1.3% • Weighted average
Slide 15: Australian Portfolio: Major redevelopment projects
Charter Hall Retail REIT Australian Portfolio Major redevelopment projects Project Value Yield Completion ($m) Completed Projects Allenstown Square, Qld 16.7 9.1% May 13 Singleton Square, NSW 61.7 8.3% Aug 13 Total 78.4 8.5% FY14 Board Approved Projects South Hedland, WA 15.2 11.4% Oct 13 Artist imp
Slide 16: Financial Performance
Financial Performance
Slide 17: Operating Earnings and Distributions
Charter Hall Retail REIT Operating Earnings and Distributions • Operating earnings per unit increased by 3.3% Jun Jun over the year: A$m 2013 2012 – Australian property income up following acquisitions Australian net property income 108.7 100.2 and underlying income growth – Disposal activity contin
Slide 18: Balance Sheet
Charter Hall Retail REIT Balance Sheet 30 June 2013 Post balance date initiatives1 Australia Offshore Total Australia Offshore Total Total assets 1,625 409 2,034 1,635 162 1,797 Total debt (516) (295) (811) (486) (115) (601) Other liabilities (64) (38) (102) (64) (11) (75) Net assets 1,045 76 1,121
Slide 19: Debt Facility Refinance
Charter Hall Retail REIT Debt Facility Refinance • Opportunity identified to refinance existing bilateral debt facility with new syndicated facility • Documentation completed in August to refinance $385 million debt facility and deliver: – Extended term to August 2018 (five year facility) – Reduced
Slide 20: Debt Maturity Profile
Charter Hall Retail REIT Debt Maturity Profile Debt Maturity Profile at 21 August 20131 • FY13 weighted average interest cost of 5.7%2, reduced FY14 from 6.3% in FY12 FY15 • Restructured Australian swap book with average swap FY16 rate reducing from 4.9% in FY13 to 2.8% in FY14 FY17 • Liquidity of $
Slide 21: Strategy and Outlook
Strategy and Outlook
Slide 22: Australian Retail Sector
Charter Hall Retail REIT Australian Retail Sector Supermarket anchored shopping centres Retail sales growth One year total return by asset type 1-yr Growth % 3-yr CAGR % 5-yr CAGR % Income Return Capital Growth Total Return 12% Total 10% 9.2% 9.1% Café & Rest. 8.7% 8.7% 7.8% 8% Other Department Stor
Slide 23: Strategy
Charter Hall Retail REIT Strategy • Maintain and enhance the REIT’s Australian portfolio through focus on: – Non-discretionary retail spending – Enhancing property returns via vertically integrated Charter Hall management platform – Proactive equity and debt management • Complete reweighting to Aust
Slide 24: FY14 Outlook
Charter Hall Retail REIT FY14 Outlook From 1 July 2013 the REIT’s German operations will no longer be included in the REIT’s operating earnings: • These properties are being prepared for sale and earnings from these operations are not available for distribution • The higher quality earnings of the A
Slide 25: Annexures
Annexures
Slide 26: Annexures
Charter Hall Retail REIT Annexures 1 Balance Sheet & NTA Reconciliation Slide 26-27 2 Debt & Covenants Slide 28-29 3 Hedging Profile Slide 30 4 Capital Expenditure & Development Pipeline Slide 31-32 5 Offshore Portfolio Slide 35 6 Portfolio Detail Slide 33-34 7 Glossary Slide 35 25
Slide 27: Balance Sheet
Charter Hall Retail REIT Annexure Balance Sheet Australia Germany Poland Other Jun 2013 Jun 2012 Total assets 1,625 128 247 34 2,034 1,888 Total debt (516) (110) (175) (10) (811) (763) Other liabilities1 (64) (3) (32) (3) (102) (112) Net assets 1,045 15 40 21 1,121 1,013 Units on issue (millions) 33
Slide 28: NTA reconciliation
Charter Hall Retail REIT Annexure NTA reconciliation Australia +0.12 $3.21 $3.06 +0.05 (0.02) $3.09 NTA at 30 June 2012 Offshore disposals and Acquisition costs NTA at 30 June 2013 Settlment of Polish sale NTA post Polish sale reweighting to Australia incurred Offshore $0.32 (0.05) (0.04) $0.23 (0.1
Slide 29: Debt maturities August 2013
Charter Hall Retail REIT Annexure Debt maturities 21 August 2013 (All Values CQR Share) Region Limit Drawn Drawn Rate Maturity (Natural M’s) (Natural M’s) (A$M) Germany EUR 80.8 80.8 115.1 Floating Dec-14 Woodstock Crossing US 0.7 0.7 0.8 Fixed May-15 A$CMBS AUS 250.0 250.0 250.0 Floating Sep-15 AUS
Slide 30: Covenants
Charter Hall Retail REIT Annexure Covenants 30 June 2013 Limit Drawn Unused Maturity Financial Covenants Covenant Actual (All Values CQR Share) Australia A$m A$m A$m Multi-Currency Facility 425.01 269.2 155.8 Aug-181 Security pool gearing 60.0% 39.6% Security pool ICR 1.85x 2.80x Head trust Gearing2
Slide 31: Interest rate risk management
Charter Hall Retail REIT Annexure Interest rate risk management Australia FY14 FY15 FY16 Weighted average hedge book (A$m) 415 415 340 Weighted average debt margin1 1.7% 1.7% 1.7% Weighted average hedge rate 2.8% 2.8% 3.1% United States FY14 FY15 FY16 Weighted average fixed debt (US$m) 10 9 9 Weight
Slide 32: Capital expenditure
Charter Hall Retail REIT Annexure Capital expenditure Total Maintenance And Region (A$m, CQR Share) Maintenance Lease Incentives Incentives Redevelopment Australia FY13 6.1 1.8 7.9 60.9 FY12 4.6 2.1 6.7 20.5 FY11 5.2 1.1 6.3 8.7 New Zealand FY13 0.1 - 0.1 - FY12 - - - - FY11 0.1 - 0.1 - United State
Slide 33: Major redevelopment projects pipeline
Charter Hall Retail REIT Annexure Major redevelopment projects pipeline FY13 FY14 FY15 FY16 Wanniassa, $19.1m Mackay, $11.1m Mount Hutton, $18.8m Secret Harbour, $29.0m Carnes Hill, $4.7m Caboolture, $15.2m Lansell Square, $30.6m Orange, $5.4m South Hedland, $15.2m Singleton Square, $61.7m Allenstow
Slide 34: Offshore assets as at June 2013
Charter Hall Retail REIT Annexure Offshore assets as at 30 June 2013 All Values Represent CQR Share Poland1 Germany US New Zealand Total Number of properties 5 2 3 2 12 CQR ownership 100% 100% 100% 50% n/a Book values (m’s) €171.8 €89.6 US$24.0 NZ$8.2 n/a Net equity (A$m) 402 15 14 7 76 GLA (‘000 sq
Slide 35: Australia – anchor tenant lease expiry
Charter Hall Retail REIT Annexure Australia – anchor tenant lease expiry 70% 63.3% 60% 50% 40% 30% 20% 9.9% 10% 5.5% 5.8% 6.5% 3.9% 3.4% 0.2% 1.5% 0% FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22+ Excludes properties under redevelopment 34
Slide 36: Australia – specialty tenant lease expiry
Charter Hall Retail REIT Annexure Australia – specialty tenant lease expiry 30% 25% 20% 18.7% 17.8% 16.8% 15.7% 14.5% 15% 10% 7.2% 3.9% 5% 2.8% 2.6% 0% FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22+ Excludes properties under redevelopment 35
Slide 37: Glossary
Charter Hall Retail REIT Annexure Glossary • ABR: Annual base rent – base rent only, excludes outgoings and turnover rent • GLA: Gross lettable area • Gross rent: Base rent and outgoings • MAT: Moving annual turnover – calculated as a sum of rolling 12 month sales • Occupancy cost: Calculated as the
Slide 38: Further information
Charter Hall Retail REIT Further information Scott Dundas Fund Manager +61 2 8295 1009 scott.dundas@charterhall.com.au Philip Schretzmeyer Deputy Fund Manager +61 2 8295 1023 philip.schretzmeyer@charterhall.com.au Kylie Ramsden Head of Listed Investor Relations +61 2 8925 1016 kylie.ramsden@charterh
Slide 39: Important Notice
Charter Hall Retail REIT Important Notice This presentation has been prepared by Charter Hall Retail Management Limited (ABN 46 069 709 468: AFSL 246996) as the responsible entity for Charter Hall Retail REIT (“CQR”). It is a presentation of general background information about the CQR’s activities
Slide 40: Slide 40