Charter Hall Retail Reit · ASX:CQR
Charter Hall Retail Reit — H1 2015 Earnings Presentation
42 slides from Charter Hall Retail Reit's earnings presentation, Feb 19, 2015
Slide 1: 2015 Half Year Results
19 February 2015 Charter Hall Retail REIT For personal use only 2015 Half Year Results
Slide 2: Agenda
Charter Hall Retail REIT Agenda For personal use only Scott Dundas Philip Schretzmeyer Fund Manager Deputy Fund Manager 1 Half Year Results 2 Australian Operational Performance 3 Portfolio Investments 4 Financial Performance 5 Strategy and Outlook Charter Hall Retail REIT | Half Year Results 31 Dece
Slide 3: Half year results
For personal use only Half year results
Slide 4: Key achievements
Charter Hall Retail REIT Key achievements Half year ended 31 December 2014 For personal use only 7.5% increase in Operating NTA up 3.5% to Australian earnings of $3.52 pu portfolio to 14.87 cpu $2.14 billion $166 million of capital Look through Occupancy committed to gearing down stable at 98.5% Aus
Slide 5: Consistent delivery on strategy
Charter Hall Retail REIT Consistent delivery on strategy Highlights For personal use only Strategy Achievements Active management • Occupancy maintained at 98.5% • Same property NOI growth of 3.4% • Specialty rent growth of 2.0% achieved from 51 renewals and 871 new leases Enhancing the portfolio •
Slide 6: Half year results December 2014 key metrics
Charter Hall Retail REIT Half year results 31 December 2014 For personal use only Key metrics 1H 15 1H 14 Movement Statutory profit $84.3m $20.6m +309.2% Operating earnings1 $55.3m $51.1m +8.2% Operating earnings1 per unit 14.87 cents 14.84 cents +0.2% Distributions per unit 13.70 cents 13.65 cents
Slide 7: Australian operational performance
Australian operational performance Active Management For personal use only
Slide 8: Portfolio summary
Charter Hall Retail REIT Portfolio summary For personal use only Same • Specialty rent growth of +2.0%: Summary by GLA Property NOI – +1.8% on 51 renewals Asset Type #1 (‘000sqm) Occupancy2 Growth – +2.6% on 21 new leases Sub-regional shopping 16 242.5 98.5% 2.5% • Specialty retention rate of 80% ce
Slide 9: Anchor tenants
Charter Hall Retail REIT Anchor tenants For personal use only Top 5 tenants by annual base rent • Wesfarmers and Woolworths businesses represent 52% of ABR – 42% from Supermarkets and Liquor Woolworths Woolworths, 26.4% – 10% from Discount Department Stores • 47% of anchor tenants are paying turnove
Slide 10: Specialty tenants
Charter Hall Retail REIT Specialty tenants For personal use only % of Occupancy MAT Summary by Category ABR Cost1 Growth1 Specialty occupancy cost of 9.4% Food catering 8% 12.7% 0.1% • Average specialty gross rent $813/sqm Services 8% 11.7% 3.9% • Sales productivity of $8,658/sqm Pharmacy 6% 9.5% 2.
Slide 11: Portfolio investments
Portfolio investments Enhancing the Portfolio Quality For personal use only
Slide 12: Revaluations
Charter Hall Retail REIT Revaluations For personal use only Six months to Dec 2014 Freestanding Neighbourhood Sub-regional Total Number of properties 18 43 17 78 Dec 2014 valuation (A$m) 192.8 1,058.3 887.3 2,138.4 Prior book value1 (A$m) 188.7 1,028.4 863.8 2,080.9 Movement in book value2 (A$m) 4.1
Slide 13: Capital transactions
Charter Hall Retail REIT Capital transactions Capital Recycling For personal use only Acquisitions GLA (sqm) Value $m Yield Settlement Coomera City Centre, Qld 9,431 59.2 7.4% July 2014 Brickworks Marketplace, SA1,2 (50% interest) 17,300 37.5 6.9% June 2015 est. Total 26,731 96.7 7.2% Disposals GLA
Slide 14: Case study: Brickworks Marketplace, SA
Charter Hall Retail REIT Case study Brickworks Marketplace, SA For personal use only Key metrics (100% interest) Estimated valuation on completion $75.0m Year one Yield 6.89% Gross lettable area (GLA) 17,300sqm Anchor rent (% of total centre ABR) 49% • Property acquired in existing Retail Partnershi
Slide 15: Redevelopments
Charter Hall Retail REIT Redevelopments Current and completed projects enhancing portfolio quality For personal use only Project Project Stabilised Completion Description Status cost ($m) Yield1 New Coles box and expansion of Stage 1 practical completion Lansell Woolworths. Addition of Reject occurr
Slide 16: Financial performance
Financial performance Prudent Capital Management For personal use only
Slide 17: Operating earnings and distributions
Charter Hall Retail REIT Operating earnings and distributions For personal use only • Enhanced disclosure relating to new segment note, A$m 1H 15 1H 14 providing NOI by asset type Net property income • Sub-regional NOI increased following the completion of redevelopments at Singleton, South Hedland,
Slide 18: Funds from operations (FFO)
Charter Hall Retail REIT Funds from operations (FFO) For personal use only • Following the finalisation of the REIT’s offshore 1H 15 1H 15 disposal program, operating earnings now aligns $m cpu with the Property Council definition of Funds from Statutory Profit 84.3 22.69 Operations (FFO) Revaluatio
Slide 19: Balance sheet
Charter Hall Retail REIT Balance sheet For personal use only Dec 14 Jun 14 • Australian properties under management increased due to: Australian properties 2,138 1,989 – Development, maintenance capex and lease incentives totalling $32 million Offshore properties - 126 – Acquisitions of $63 million
Slide 20: Debt maturity profile
Charter Hall Retail REIT Debt maturity profile For personal use only • Syndicated bank debt facility refinanced during the period Debt Maturity Profile at 31 December 2014 and extended for one year • JV bank debt extended for one year to July 20181 2H 15 • An incremental $250 million tranche of the
Slide 21: Strategy and outlook
For personal use only Strategy and outlook
Slide 22: Disciplined investment strategy
Charter Hall Retail REIT Disciplined investment strategy For personal use only Typical Typical GLA Anchor Tenants Investment Strategy Woolworths Neighbourhood < 10,000sqm • Neighbourhood and sub-regional Coles supermarket anchored Woolworths Coles • $20 - $100m asset value Sub-regional 10,000 to 40,
Slide 23: REIT strategy
Charter Hall Retail REIT REIT strategy For personal use only The pre-eminent owner and manager of Australian neighbourhood and Goal sub-regional supermarket anchored shopping centres that optimises returns for our investors Active Enhance Prudent management portfolio quality capital management • Mai
Slide 24: FY15 outlook
Charter Hall Retail REIT FY15 outlook For personal use only • We confirm that, barring unforeseen events, the REIT’s FY15 guidance for operating earnings is between 29.6 and 30.0 cents per unit • Distribution payout ratio range is expected to be between 90% and 95% of operating earnings Coomera Squa
Slide 25: Questions
For personal use only Questions
Slide 26: Annexures
For personal use only Annexures
Slide 27: Annexures
Charter Hall Retail REIT Annexures For personal use only 1 Detailed Earnings Slide 27 2 NTA & Cashflow Reconciliation Slide 28 3 Debt & Interest Rate Management Slide 29 4 Capital Expenditure & Redevelopment Pipeline Slide 30 – 31 5 Lease Expiry Profiles Slide 32 – 33 6 Property Valuations Slide 34
Slide 28: Detailed earnings
Charter Hall Retail REIT Annexure 1 Detailed earnings For personal use only (All Values In A$m) Dec 2014 Dec 2014 Dec 2014 Dec 2013 Statutory Unrealised And Operating Operating Share of profits from investment in JV’s Profit Other Items Earnings Earnings Net property income Sub-regional 4.2 - 4.2 4.
Slide 29: NTA per unit reconciliation
Charter Hall Retail REIT Annexure 2 For personal use only NTA per unit reconciliation $3.40 (0.03) +0.14 +0.01 $3.52 NTA at A$ interest rate Property revaluation uplift Operating earnings NTA at 30 Jun 2014 swap MtM (net of distribution) 31 Dec 2014 Operating earnings to operating cash flows reconci
Slide 30: Debt and interest rate management
Charter Hall Retail REIT Annexure 3 Debt and interest rate management For personal use only Debt maturities & covenants 31 December 2014 Limit Drawn Rate Maturity Financial Covenants Covenant Actual (All Values CQR Share) (A$m) (A$m) CMBS 250.0 250.0 Floating Sep-15 n/a n/a n/a LVR 55.0% 38.9% JV de
Slide 31: Capital expenditure
Charter Hall Retail REIT Annexure 4 Capital expenditure For personal use only Total Maintenance Region (A$m, CQR Share) Maintenance Lease Incentives and Incentives Redevelopment Australia 1H 15 3.4 1.1 4.5 27.9 FY14 7.8 2.3 10.1 59.4 FY13 6.1 1.8 7.9 60.9 Charter Hall Retail REIT | Half Year Results
Slide 32: Major redevelopment projects pipeline
Charter Hall Retail REIT Annexure 4 Major redevelopment projects pipeline For personal use only FY14 FY15 FY16 FY17 1H 2H Rockhampton (stage 2), $25.0m Mount Hutton, $23.0m Secret Harbour, $46.2m South Hedland (stage 2), $22.7m Gladstone, $2.1m Mackay, $5.2m Caboolture, $17.0m Lansell Square, $39.0m
Slide 33: Anchor tenant lease expiry
Charter Hall Retail REIT Annexure 5 Anchor tenant lease expiry For personal use only 80% 70% 66.5% 60% 50% 40% 30% 20% 10% 7.5% 8.5% 5.1% 4.2% 5.6% 0.8% 1.2% 0.6% 0% 2H 15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23+ Excludes properties under redevelopment Charter Hall Retail REIT | Half Year Results 31
Slide 34: Specialty tenant lease expiry
Charter Hall Retail REIT Annexure 5 Specialty tenant lease expiry For personal use only 30% 25% 20% 17.7% 15.5% 15.6% 14.6% 15% 10.9% 10.1% 10% 6.8% 4.0% 4.8% 5% 0% 2H 15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23+ Excludes properties under redevelopment Charter Hall Retail REIT | Half Year Results 31
Slide 35: Property valuations as at December 2014
Charter Hall Retail REIT Annexure 6 Property valuations as at 31 December 2014 For personal use only State Property Location Asset Type Interest % Book Value ($m) Cap rate ACT Dickson Woolworths Dickson Freestander 100% 15.7 6.75% Erindale Shopping Centre Wanniassa Neighbourhood 100% 35.8 7.52% Manu
Slide 36: Property valuations as at December 2014
Charter Hall Retail REIT Annexure 6 Property valuations as at 31 December 2014 For personal use only State Property Location Asset Type Interest % Book Value ($'m) Cap rate Rosehill Woolworths Rosehill Freestander 100% 10.4 6.50% Rutherford Marketplace Rutherford Neighbourhood 50% 15.3 7.00% Singlet
Slide 37: Property valuations as at December 2014
Charter Hall Retail REIT Annexure 6 Property valuations as at 31 December 2014 For personal use only State Property Location Asset Type Interest % Book Value ($'m) Cap rate Sydney Street Markets1 Mackay Neighbourhood 100% 40.9 n/a Tablelands Square Atherton Neighbourhood 100% 29.5 7.50% QLD Total 47
Slide 38: Property valuations as at December 2014
Charter Hall Retail REIT Annexure 6 Property valuations as at 31 December 2014 For personal use only State Property Location Asset Type Interest % Book Value ($'m) Cap rate Esperance Boulevard Esperance Neighbourhood 100% 28.7 7.75% Kalgoorlie Central Kalgoorlie Neighbourhood 100% 32.3 7.75% Mayland
Slide 39: Glossary
Charter Hall Retail REIT Annexure 7 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 8651 9273 scott.dundas@charterhall.com.au Philip Schretzmeyer Deputy Fund Manager +61 2 8651 9246 philip.schretzmeyer@charterhall.com.au Nick Kelly Head of Investor Relations +61 2 8651 9235 nick.kelly
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
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