Charter Hall Retail Reit · ASX:CQR
Charter Hall Retail Reit — FY2013 Earnings Presentation
42 slides from Charter Hall Retail Reit's earnings presentation, Aug 21, 2013
Slide 1: 2013 Full Year Results
Charter Hall Retail REIT For personal use only 2013 Full Year Results
Slide 2: Agenda
Charter Hall Retail REIT Agenda For personal use only Scott Dundas John Courtney Philip Schretzmeyer Fund Manager Head of Retail Asset Deputy Fund Manager Management 1 Full Year Results 2 Portfolio Investments 3 Australian Operational Performance 4 Financial Performance 5 Strategy and Outlook 1
Slide 3: Full Year Results
For personal use only Full Year Results
Slide 4: Financial results – year ended June 2013
Charter Hall Retail REIT Full Year Results Financial results – year ended 30 June 2013 For personal use only 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 u
Slide 5: Highlights
Charter Hall Retail REIT Highlights For personal use only 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 • $62 million Singleton Square r
Slide 6: Portfolio Investments
Portfolio Investments For personal use only
Slide 7: Revaluations
Charter Hall Retail REIT Revaluations Australian supermarket anchored For personal use only Six months to Jun 2013 Freestanders Neighbourhood Sub-regional Total Number of properties 19 41 14 74 June 2013 valuation (A$m) 184.1 878.8 594.7 1,657.6 Prior book value1 (A$m) 182.4 883.5 590.3 1,656.2 Move
Slide 8: Improving Earnings Quality
Charter Hall Retail REIT Improving Earnings Quality For personal use only FY13 achievements • Polish assets contracted for sale for €174.5 million, forecast to realise net proceeds of A$60 million upon settlement in September 2013 • Redevelopment of Chemnitz is substantially progressed with stabilis
Slide 9: Australian Acquisitions: Disciplined investment strategy
Charter Hall Retail REIT Australian Acquisitions Disciplined investment strategy For personal use only 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.
Slide 10: Australian Acquisitions: Completed acquisitions
Charter Hall Retail REIT Australian Acquisitions Completed acquisitions For personal use only 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 Ha
Slide 11: Australian Operational Performance
Australian Operational Performance For personal use only
Slide 12: Australian Portfolio: Summary
Charter Hall Retail REIT Australian Portfolio Summary For personal use only • 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 sus
Slide 13: Australian Portfolio: Anchor tenants
Charter Hall Retail REIT Australian Portfolio Anchor tenants For personal use only 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%
Slide 14: Australian Portfolio: Specialty tenants
Charter Hall Retail REIT Australian Portfolio Specialty tenants For personal use only 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 $8,246/sqm Food catering 7% 11.3% 1
Slide 15: Australian Portfolio: Major redevelopment projects
Charter Hall Retail REIT Australian Portfolio Major redevelopment projects For personal use only Project Value Yield Completion ($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 1
Slide 16: Financial Performance
Financial Performance For personal use only
Slide 17: Operating Earnings and Distributions
Charter Hall Retail REIT Operating Earnings and Distributions For personal use only • 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 – Di
Slide 18: Balance Sheet
Charter Hall Retail REIT Balance Sheet For personal use only 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
Slide 19: Debt Facility Refinance
Charter Hall Retail REIT Debt Facility Refinance For personal use only • 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 yea
Slide 20: Debt Maturity Profile
Charter Hall Retail REIT Debt Maturity Profile For personal use only 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
Slide 21: Strategy and Outlook
For personal use only Strategy and Outlook
Slide 22: Australian Retail Sector
Charter Hall Retail REIT Australian Retail Sector Supermarket anchored shopping centres For personal use only 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%
Slide 23: Strategy
Charter Hall Retail REIT Strategy For personal use only • 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 • Comple
Slide 24: FY14 Outlook
Charter Hall Retail REIT FY14 Outlook For personal use only 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 qua
Slide 25: Questions
For personal use only Questions
Slide 26: Annexures
For personal use only Annexures
Slide 27: Annexures
Charter Hall Retail REIT Annexures For personal use only 1 Detailed Earnings Slide 27 2 Balance Sheet & NTA Reconciliation Slide 28-29 3 Debt & Covenants Slide 30-31 4 Hedging Profile Slide 32 5 Capital Expenditure & Development Pipeline Slide 33-34 6 Offshore Portfolio Slide 35 7 Portfolio Detail S
Slide 28: Annexure: Detailed earnings
Charter Hall Retail REIT Annexure 1 Detailed earnings For personal use only (All Values In A$M) Jun 2013 Jun 2013 Jun 2013 Jun 2012 Statutory Unrealised And Operating Operating Share of profits from investment in JV’s Profit Other Items Earnings Earnings Net property income 18.4 (0.1) 18.3 17.6 Prop
Slide 29: Annexure: Balance Sheet
Charter Hall Retail REIT Annexure 2 Balance Sheet For personal use only 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 Unit
Slide 30: Annexure: NTA reconciliation
Charter Hall Retail REIT Annexure 2 NTA reconciliation For personal use only 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 $0.32
Slide 31: Annexure: Debt maturities
Charter Hall Retail REIT Annexure 3 Debt maturities For personal use only 21 August 2013 (All Values CQR Share) Region Limit Drawn Drawn Rate Maturity (Natural M’s) (Natural M’s) (A$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$CMBS AUS 250.0 250.0 2
Slide 32: Annexure: Covenants
Charter Hall Retail REIT Annexure 3 Covenants For personal use only 30 June 2013 Limit Drawn Unused Maturity Financial Covenants Covenant Actual (All Values CQR Share) Australia A$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
Slide 33: Annexure: Interest rate risk management
Charter Hall Retail REIT Annexure 4 Interest rate risk management For personal use only Australia FY14 FY15 FY16 Weighted average hedge book (A$m) 415 415 340 Weighted average debt margin1 1.7% 1.7% 1.7% Weighted average hedge rate 2.8% 2.8% 3.1% United States FY14 FY15 FY16 Weighted average fixed d
Slide 34: Annexure: Capital expenditure
Charter Hall Retail REIT Annexure 5 Capital expenditure For personal use only Total Maintenance And Region (A$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
Slide 35: Annexure: Major redevelopment projects pipeline
Charter Hall Retail REIT Annexure 5 Major redevelopment projects pipeline For personal use only 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
Slide 36: Annexure: Offshore assets as at June 2013
Charter Hall Retail REIT Annexure 6 Offshore assets as at 30 June 2013 For personal use only 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
Slide 37: Annexure: Australia – anchor tenant lease expiry
Charter Hall Retail REIT Annexure 7 Australia – anchor tenant lease expiry For personal use only 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 36
Slide 38: Annexure: Australia – specialty tenant lease expiry
Charter Hall Retail REIT Annexure 7 Australia – specialty tenant lease expiry For personal use only 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 37
Slide 39: Annexure: Glossary
Charter Hall Retail REIT Annexure 8 Glossary For personal use only • 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
Slide 40: Further information
Charter Hall Retail REIT Further information For personal use only 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
Slide 41: Important Notice
Charter Hall Retail REIT Important Notice For personal use only Charter Hall Retail Management Limited ABN 46 069 709 468; AFSL 246996 (“CHRML”) has issued this presentation in its capacity as the responsible entity of Charter Hall Retail REIT ARSN 093 143 965 (“CQR” or “the REIT”). This presentatio
Slide 42: For personal use only
For personal use only
Charter Hall Retail REIT — FY2013 Earnings Presentation on 6ix