Slide 1: Half Year Results 6 months to 31 December 2014
25 February 2015 Charter Hall Group For personal use only Half Year Results 6 months to 31 December 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 1HY15 Results Summary 2 Property Investments 3 Property Funds Management 4 Financial Result 5 Outlook and Guidance 6 Additional Info
Slide 3: 1HY15 Results Summary
1HY15 Results Summary For personal use only
Slide 4: Key achievements
Charter Hall Group Key achievements 1HY15 Results Summary1 For personal use only Total OEPS growth DPS growth Securityholder 10.6% on pcp 10.0% on pcp Return of 30%2 $2.0bn in Australian FUM $944m gross transactions up 10.4% to equity inflows $1.4bn of acquisitions $0.6bn of divestments $12.7bn $741
Slide 5: Solid organic growth in Australian platform
Charter Hall Group Solid organic growth in Australian platform 1HY15 Results Summary For personal use only •Increase in operating earnings per security (OEPS) to 13.74cps, up 10.6% – Statutory profit after tax of $39.9m, up from $28.6m – Operating earnings of $48.4m1, up 27.1% on pcp – Distribution
Slide 6: Total securityholder returns
Charter Hall Group Total securityholder returns 1HY15 Results Summary For personal use only • Total securityholder return for 1 year to 31 Dec 2014: 30.3% • Best performance in A-REIT 200 index over 3 years: 39.5% pa1 Total performance over 1, 3 and 5 years (% pa) Distribution per security growth to
Slide 7: Consistent delivery on strategy
Charter Hall Group Consistent delivery on strategy 1HY15 Results Summary 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
Slide 8: Operating earnings composition
Charter Hall Group Operating earnings composition 1HY15 Results Summary For personal use only Operating earnings of $48.4m1, up 27.1% pcp from $38.1m • 57% of operating earnings from property investments • Property investments growth of 22.8% pcp 800 Property Investment Earnings Drivers 8% Property
Slide 9: Property Investments
For personal use only Property Investments
Slide 10: PI earnings grow by 22.8% to $28.4m
Charter Hall Group PI earnings grow by 22.8% to $28.4m Property Investments For personal use only • Charter Hall Group’s balance sheet investments increased by $75m to $795m • Portfolio WALE1 increased by 1.9 years to 9.5 years during 1HY15, following investment into LWIP • Occupancy increased 0.8%
Slide 11: Enhanced portfolio quality
Charter Hall Group Enhanced portfolio quality Property Investments For personal use only In line with our strategy, Charter Hall Group has continued to focus on reweighting its Property Investments towards a more diversified portfolio • Property Investment portfolio has increased its exposure to lon
Slide 12: Portfolio WALE and lease expiry
Charter Hall Group Portfolio WALE and lease expiry Property Investments For personal use only • CHC Portfolio composition and upcoming lease expiries actively managed − Property Investment portfolio WALE increased from 7.6 years to 9.5 years during 1HY15 − 54% of leases expiring in 8 years or more F
Slide 13: Top tenants by gross income
Charter Hall Group Top tenants by gross income Property Investments For personal use only • Property Investments portfolio has high occupancy at 97.6% • Focus on quality of tenant covenants Occupancy by Gross Income2 Top 10 Tenants by Gross Income1 LWIP 100.0% Woolworths 22.9% Wesfarmers 11.7% CPIF
Slide 14: Property Funds Management
Property Funds Management For personal use only
Slide 15: Well diversified funds management portfolio
Charter Hall Group Well diversified funds management portfolio Property Funds Management For personal use only Portfolio Size No. of No. of Gross income WALE Occupancy Average cap rate ($bn) properties tenants ($m) (years) (%) (%) Dec 14 12.7 270 2,264 1,081 8.1 97.5% 7.30% Jun 14 11.5 209 2,289 1,0
Slide 16: Office sector activity
Charter Hall Group Office sector activity Property Funds Management For personal use only 6 months to 31 December 2014 • $6.5bn in Office funds under management with $220m of acquisitions and $462m of divestments • $220m acquisition of the University of Western Sydney’s new office campus in Parramat
Slide 17: Retail sector activity
Charter Hall Group Retail sector activity Property Funds Management For personal use only 6 months to 31 December 2014 • Total Australian retail FUM has increased by 11.9% to $3.3bn during 1HY15 with Charter Hall now managing 108 retail assets throughout Australia • Total 183 leasing deals over 42,8
Slide 18: Industrial sector activity
Charter Hall Group Industrial sector activity Property Funds Management For personal use only 6 months to 31 December 2014 • Industrial FUM has grown 18% to $2.5bn during 1HY15 • Occupancy close to 100% with 8 leases totaling 78,738sqm during the half. WALE at 10.2 years • Acquisition of the 6 asset
Slide 19: Hospitality sector activity
Charter Hall Group Hospitality sector activity Property Funds Management For personal use only 6 months to 31 December 2014 • Established the Group’s first investment in the Hospitality sector via a new wholesale partnership, LWIP (Long WALE Investment Partnership) which is a 50/50 JV between Charte
Slide 20: Australian FUM growth of 10.4% drives earnings
Charter Hall Group Australian FUM growth of 10.4% drives earnings Property Funds Management For personal use only • FUM growth driven by activity in the Industrial, Retail and new Hospitality sector − Australian property FUM has increased $1.2bn, or 10.4% during 1HY15 to $12.7bn − 13.4% CAGR in dome
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 $0.9bn in gross equity flows2 ($0.7bn net) during 1HY15 across all equity sources FY13 FY14 1HY15 ($m) ($m) ($m) Wholesale Pooled Funds 147 651 364 Whol
Slide 22: PFM EBITDA growth of 29.3%
Charter Hall Group PFM EBITDA growth of 29.3% Property Funds Management For personal use only • PFM EBITDA margin on revenue has increased from 36.1% to 39.7% 40.0 36.7 $m 1HY15 1HY14 Growth 1HY14 35.0 1HY15 Revenue 55.9 47.5 17.6% 29.7 30.0 PFM Revenue ($m) Net operating expenses (33.7) (30.4) 11.0
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 enhance both Development activity On completion value income yield and total returns (current projects underway) Retail $384m • In-house development s
Slide 24: Financial Result
For personal use only Financial Result
Slide 25: Profit and Loss by segment
Charter Hall Group Profit and Loss by segment Financial result For personal use only • 27.1% growth in Operating Earnings to $48.4m $m 1HY15 1HY14 Change % Property investment 28.4 23.2 22.8% • PI operating earnings up 22.8% to $28.4m – increased investments in LWIP, CLP, CQR and LWHP Property funds
Slide 26: Property Investments earnings growth of 22.8%
Charter Hall Group Property Investments earnings growth of 22.8% Financial result For personal use only • Operating earnings from property investments up 22.8% to $28.4m – $0.4m earnings growth from investments held for a comparable period – $7.0m contribution from increased investments in LWIP, CLP
Slide 27: Property Funds Management earnings up 27.4%
Charter Hall Group Property Funds Management earnings up 27.4% Financial result For personal use only • PFM operating earnings up 27.4% to $21.3m $m 1HY15 1HY14 Change % Investment Management 36.7 29.7 23.4% • PFM EBITDA margin has expanded by 3.6% to 39.7% Property Services 19.2 17.8 8.0% • Investm
Slide 28: Balance Sheet Capacity
Charter Hall Group Balance Sheet Capacity Financial result For personal use only • Strong balance sheet maintained $m 31 Dec 14 30 June 14 – $151m investment in LWIP Cash 12 50 – Continued capital recycling including $55m of LWHP Property Investments 795 720 – Property Investments represent 94% of n
Slide 29: NTA per security and Cap Rate bridge
Charter Hall Group NTA per security and Cap Rate bridge Financial result For personal use only NTA ($ per security) Weighted Average Cap Rate1 2.50 7.60% (0.12%) (0.06%) 0.04 (0.04) 7.40% (0.06%) 2.40 (0.05%) $ per security (0.11%) 7.20% 2.38 2.42 2.30 7.57% 7.17% 2.38 7.28% 7.00% 2.20 6.80% 30 June
Slide 30: CHC Cashflow
Charter Hall Group CHC Cashflow Financial result For personal use only 60.0 Operating Earnings to Operating Cashflow • 1HY15 distribution covered by operating 50.0 ($1.7m) ($3.0m) ($2.3m) $1.3m $1.1m cashflow 40.0 $48.4m $43.7m $43.0m • DRP participation of 44.6% will retain 30.0 approximately $19m
Slide 31: Outlook and Guidance
For personal use only Outlook and Guidance
Slide 32: FY15 outlook and earnings guidance
Charter Hall Group FY15 outlook and earnings guidance Outlook and guidance For personal use only • The Australian property yield spread to bond yields and the cost of debt remains attractive for domestic and offshore investors • Charter Hall continues to focus on investing in assets with strong tena
Slide 33: Additional Information
Additional Information For personal use only
Slide 34: Additional information
Charter Hall Group Additional information For personal use only Section Slide 1 Group & Managed Funds Overview 34-36 2 Property Investment Portfolio 37 3 Fund Updates 38-43 4 Financial Information 44-47 5 Capital Management and Funding 48-50 6 Fund Key 51 Charter Hall Group | Half Year Results 31 De
Slide 35: Group overview
Charter Hall Group Charter Hall Group Group overview For personal use only Property Funds Management Platform $12.7bn FUM • Investment management FUM $12.7bn • Asset management • Transaction services No. of properties 270 • Property management • Capital management Gross income $1.1bn • Development m
Slide 36: Managed funds
Charter Hall Group Charter Hall managed funds FUM as at 31 December 2014 For personal use only Listed AREIT Wholesale Pooled funds, Partnerships and Mandates Retail investor funds Funds being realised $2.1bn $8.8bn $1.7bn $0.1bn ($139m co-invested) ($632m co-invested) ($23m co-invested) ($2m equity
Slide 37: Managed funds
Charter Hall Group Charter Hall managed funds As at 31 December 2014 For personal use only 2 2,3 Total Sector Equity Source No. of Lettable Occupancy Weighted WALE Weighted property Properties area (sqm) average rent (in years) average cap assets review rate ($m) Top Managed Funds CQR 2,138 Retail L
Slide 38: CHC Property Investment portfolio
Charter Hall Group CHC Property Investment portfolio As at 31 December 2014 For personal use only Ownership Stake Charter Hall Charter Hall WALE Market Cap Rate Discount Rate Average Charter Hall Investment Investment rental reviews Investment Yield Income (%) ($m) ($m) (years) (%) (%) (%) (%) Liste
Slide 39: Office Trust (CHOT)
Charter Hall Group Charter Hall Office Trust (CHOT) Property investment portfolio For personal use only Key events during 1HY15 Portfolio characteristics Key metrics Gross property assets $2.15bn • Total of 44,079sqm leases executed and terms agreed on a further 26,254sqm – representing 19% of the p
Slide 40: Retail REIT (CQR)
Charter Hall Group Charter Hall Retail REIT (CQR) Property investment portfolio For personal use only Key events during 1HY15 Portfolio characteristics Key metrics1 • Acquired two properties for $96.7 million at average initial yield of Gross property assets $2.1bn 7.2% Total look-through debt (net
Slide 41: Core Plus Office Fund (CPOF)
Charter Hall Group Core Plus Office Fund (CPOF) Property investment portfolio For personal use only Key events during 1HY15 Portfolio characteristics Key metrics 1 • CPOF acquired a 50% interest of 169 Macquarie Street, Parramatta, Gross property assets $2.2bn fully leased to the University of Weste
Slide 42: Core Logistics Partnership (CLP)
Charter Hall Group Core Logistics Partnership (CLP) Property investment portfolio For personal use only Key events during the 1HY15 Portfolio characteristics Key metrics • 4 assets of 17 in portfolio acquired during 1H15 (24% GAV) Gross property assets 1 $820m • The CLP portfolio retained high occup
Slide 43: Core Plus Industrial Fund (CPIF)
Charter Hall Group Core Plus Industrial Fund (CPIF) Property investment portfolio For personal use only Key events during the 1HY15 Portfolio characteristics 1 Key metrics • CPIF ranked as Australia’s highest performing unlisted wholesale property Gross property assets $1,014m fund (all sectors) ove
Slide 44: Long WALE Investment Portfolio (LWIP)
Charter Hall Group Long WALE Investment Portfolio (LWIP) Property investment portfolio For personal use only Key events during the 1HY15 Portfolio characteristics Key metrics • $603m acquisition of 54 ALH leased hotels including 18 Dan Murphy’s Gross property assets 1 $618m • Portfolio WALE of 20 ye
Slide 45: Key financial metrics
Charter Hall Group Key financial metrics Financial performance For personal use only GROUP 1HY15 1HY14 Change Statutory profit after tax $39.9m $28.6m 39.6% Operating earnings1 $48.4m $38.1m 27.1% Operating earnings per security (OEPS)1 13.74cps 12.42cps 10.6% Distribution per security (DPS) 12.1cps
Slide 46: Detailed operating earnings
Charter Hall Group Detailed operating earnings Financial performance For personal use only 1HY15 1HY14 Variance % ($m) ($m) ($m) Property Funds Investment Property Funds Investment Income 28.9 22.9 6.0 26.2% Net Interest Income / (Expense) (0.4) 0.4 (0.7) (200.0%) Operating Costs (0.1) (0.1) 0.0 0.0
Slide 47: Property funds management operating earnings
Charter Hall Group Property funds management operating earnings Financial performance For personal use only 1HY15 1HY14 Variance % ($000s) ($000s) ($000s) Revenue Fund management fees 24,068 22,015 2,053 9.3% Transaction and performance fees 12,622 7,725 4,897 63.4% Investment Management 36,690 29,7
Slide 48: Reconciliation of operating earnings to statutory profit after tax
Charter Hall Group Reconciliation of operating earnings to statutory profit after tax Financial performance For personal use only 1HY15 1HY14 $000s $000s Operating Earnings 48,441 38,123 Net fair value (loss) / gain on financial derivatives1 (7,348) 1,270 Net fair value adjustment on investments and
Slide 49: PFM platform debt management
Charter Hall Group PFM platform debt management Capital management and funding For personal use only Key Debt Metrics • Substantial funding capacity available across the funds platform Managed Funds Platform Dec 14 Jun 14 – $6.0bn of debt facilities across 24 funds and the Group Facility Limit ($m)
Slide 50: Debt maturity profile
Charter Hall Group Debt maturity profile Capital management and funding For personal use only • Weighted average maturity at 31 December 2014 is 3.3 • Look through weighted average maturity at 31 years down from 3.6 years at 30 June 2014 December 2014 is 3.2 years Group CHC Look Through 300 2,500 26
Slide 51: CHC look through hedge maturity profile
Charter Hall Group CHC look through hedge maturity profile Capital management and funding For personal use only CHC Look Through Hedge Maturity Profile 600 3.70% 3.60% 500 Weighted Average Hedge Rate (%) 76% 73% 3.50% 70% Hedge Notional ($m) 400 63% 55% 3.40% 300 3.30% 200 3.20% 23% 100 3.10% 0% - 3
Slide 52: Fund key
Charter Hall Group Fund key For personal use only Listed entities Retail investor funds CHC Charter Hall Group BW Trust BW Trust (Direct syndicate) CQR Charter Hall Retail REIT CDC Charter Hall Direct CDC Trust CHIF8 144 Stirling Street Trust Wholesale (Pooled and Partnerships) DIF, DIF2, DIF3 Direc
Slide 53: 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 54: 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 Nick Kelly Chief Financial Officer Head of Inv
Slide 55: For personal use only
Ajuo @sn feuosied 10-}