Slide 1: Full Year Results FY07
CHARTER HALL GROUP (CHC) For personal use only FULL YEAR RESULTS FY07 21 AUGUST 2007 Sydney Brisbane Perth Auckland CHARTER HALL GROUP . FULL YEAR FY 07 RESULTS 1
Slide 2: Contents
Contents For personal use only • FY07 Review • Charter Hall Property Trust Update • Funds Update • Financials • Wrap-up • Appendix CHARTER HALL GROUP . FULL YEAR FY 07 RESULTS 2
Slide 3: Highlights
Highlights For personal use only • FY07 DPS at 10.44cps – 47% increase on FY06 DPS • 118% TSR to CHC security holders – 30 June 06 to 30 June 07 • 2 new wholesale funds – CHOF 5 and CPIF, raised $650m of equity • Unlisted equity commitments increased by $800m in FY07 • 26 investment assets acquired
Slide 4: Exceeding Forecasts
Exceeding Forecasts For personal use only FY07 results FY06 Variance 1. Underlying EPS is after adding back AIFRS non cash expenses DPS 10.44cps 7.10cps +47% (mainly the share based remuneration expense and tax expense on the unrealised gain in the investment in Axiom Properties Limited). NPAT $31.7
Slide 5: Key Events
Key Events For personal use only PROPERTY ACQUISITIONS / COMPLETED PROJECTS / LEASING DEALS STRATEGIC INITIATIVES CPOF CPIF CPOF 772 Boundary Road, Richlands, Brisbane. Northbank Plaza, Brisbane CBD. 50% JUL 07 34 Hunter Street, Sydney acquired for Project initial outlay $6.9m (completion acquired f
Slide 6: Key Events
Key Events For personal use only PROPERTY ACQUISITIONS / COMPLETED PROJECTS / LEASING DEALS STRATEGIC INITIATIVES CPOF CPIF CPOF / CHOF 4 275 George St, Brisbane CBD, 50% 275 George St / Northbank Plaza, Brisbane Pinkenba Brisbane, acquired for $10.4m acquired. $370m project end value CBD. 10-year,
Slide 7: CIP Acquisition
CIP Acquisition For personal use only • In June 07 CHC acquired 50% of Commercial & Industrial Property (CIP), a national private industrial development group based on a multiple of 4.76 x PBT over FY07-09 • CIP FY07 PBT exceeded expectations • FY08 WIP and profit expectations are “on track” • CIP h
Slide 8: CIP Structure
CIP Structure For personal use only CIP Vendors CHC Management and co-investment 50% 50% CIP JV partner Relationship Long term lease Investment pipeline Customer Project CPIF CHARTER HALL GROUP . FULL YEAR FY 07 RESULTS 8
Slide 9: CHC Security Price
CHC Security Price • 98% out-performance of ASX/S&P Property Trusts 300 on a total return basis For personal use only $3.30 CHC S&P/ASX LPT 300 (rebased) $2.80 $2.30 $1.80 $1.30 $0.80 Jun-06 Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Dec-06 Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun-07 Jul-07 Closing Price $2.8
Slide 10: Product Spectrum
Product Spectrum For personal use only • A range of products covering entire risk/return spectrum targeting all investor market segments Return 18%+ OPPORTUNISTIC CHOF 4, CHOF 5 15-17% ENHANCED 11-14% CORE PLUS CPOF, CPIF, CPRF 9-11% CORE CHUF, DPF, CHPT, CHIF 2-6 Lower Risk Higher Risk CRITERIA Cor
Slide 11: Established Track Record
Established Track Record For personal use only Target Asset Equity FUND CHC % # Assets Capacity Committed Allocated Year Est. Status Closed CHARTER HALL OPPORTUNITY FUND 5 (CHOF 5) 17% 0 $1,000m $300m 0% 07 Ended Closed CHARTER HALL OPPORTUNITY FUND 4 (CHOF 4) 3% 5 $500m $165m 82% 05 Ended CORE PLUS
Slide 12: Assets Under Management
Assets Under Management For personal use only $5,000m CPOF, CPIF, CHOF & CPRF Remaining Acquisition Capacity $4,000m Opportunistic Assets (completion value) $2,500m Core and Core Plus Assets $3,000m $692m $692m $2,000m $1,000m $458m $2,120m $2,120m $645m $568m $728m $833m $273m $288m $333m $415m $0m
Slide 13: Co-Investment Model
Co-Investment Model For personal use only CHARTER HALL GROUP (CHC) 17% 3% 20% 20% 20% 100% 20% 20% CHOF 5 CHOF 4 CPOF CPIF CPRF CHPT DPF CHUF $ 1bn $500m $925m → $1,250m $270m → $700m $480m → $700m $590m → $120m $125m $100m Mounts Bay Road Nortbank Plaza, Coles Myer Distribution Home HQ, Home HQ, Co
Slide 14: Property Trust Update
PROPERTY TRUST UPDATE For personal use only FULL YEAR FY07 CHARTER HALL GROUP . FULL YEAR FY 07 RESULTS 14
Slide 15: Charter Hall Property Trust (CHPT) Update
Charter Hall Property Trust (CHPT) Update For personal use only • In line with its strategy, CHC (via CHPT’s balance sheet) continues to seed new funds with assets and takes approx 20% co-investment stake in those managed funds • Acquired 6 industrial assets, which subsequently seeded the March 07 l
Slide 16: Charter Hall Property Trust (CHPT) Update
Charter Hall Property Trust (CHPT) Update For personal use only • CHPT’s investments in Core Plus funds now comprise majority of CHPT investment assets • Remaining $130m of direct CHPT investment assets provide further inventory for managed funds • Mentone Harvey Norman Centre construction expected
Slide 17: CHPT Portfolio: Pre Sell-down into CPRF
CHPT Portfolio: Pre Sell-down into CPRF GEOGRAPHIC DIVERSIFICATION For personal use only ASSET DIVERSIFICATION By Value By Value CPOF, 25.7% WA, 15.79% DPF, 1.9% SA, 0.53% NZ, 0.75% CPIF, 9.7% Chullora, 2.0% QLD, 19.29% Menai, 4.2% Bourke, 7.0% Kent, 2.7% NSW & ACT, 31.61% Nunawading, 8.5% Redcliffe
Slide 18: CHPT Portfolio: Post Sell-down into CPRF
CHPT Portfolio: Post Sell-down into CPRF GEOGRAPHIC DIVERSIFICATION For personal use only ASSET DIVERSIFICATION By Value By Value WA, 19.26% Chullora, 3.4% NZ, 1.93% SA, 0.89% CPOF, 43.4% Bourke, 11.8% QLD, 21.50% NSW & ACT, Kent, 4.6% 26.09% DPF, 3.2% CPRF, 17.2% CPIF, 16.5% VIC, 22.35% WEIGHTED AV
Slide 19: Funds Update
FUNDS UPDATE For personal use only FULL YEAR FY07 CHARTER HALL GROUP . FULL YEAR FY 07 RESULTS 19
Slide 20: Wholesale Overview
Wholesale Overview For personal use only • Largest Core Plus fund manager in Australia - $975 million total equity raised to date • Provider of sector choice for wholesale investors - Office, Industrial, Retail • Skill and track record to deliver development margins essential to equity value growth
Slide 21: Wholesale Overview
Wholesale Overview For personal use only • Largest Opportunistic fund manager in Australia - $734m equity raised to date • 5th fund in the successful series of Charter Hall’s Opportunity Funds • Total committed equity of $300m, with capacity for $1 billion of project value • Heavily over-subscribed
Slide 22: Retail Overview
Retail Overview For personal use only • Charter Hall to further penetrate the retail funds management market • Diversified Property Fund rapidly expanding • Increasing equity in-flows from major and boutique financial planning groups • 156% increase in AUM for FY07 • FY08 Launch of Charter Hall Umbr
Slide 23: Core Plus Office Fund (CPOF) Update
Core Plus Office Fund (CPOF) Update For personal use only • Achieved strong inaugural financial year gross equity IRR of 19.1% • Increased number of assets in portfolio from 3 to 12 during FY 07 • Continued high proportion of off-versus-on market acquisitions • Equity commitments from Wholesale Inve
Slide 24: Core Plus Office Fund (CPOF) Update
Core Plus Office Fund (CPOF) Update For personal use only • Gross asset capacity increased from $1,000m to $1,250m • 62% of total equity commitments drawn from Investors • High quality, geographically diversified portfolio across WA, QLD, NSW and SA • WALE of over 9.5 years • Tenants include Telstra
Slide 25: Core Plus Office Fund (CPOF) Property Portfolio
Core Plus Office Fund (CPOF) Property Portfolio For personal use only Atrium (AMEX) Stirling St Sydney Perth (Hatch) $142.2m $36.5m (100% Ownership) (100% Ownership) 333 & 331 Northbank Plaza George St (Telstra) Sydney Brisbane $82.5m $183.0m (100% Ownership) (100% Ownership) 275 George St (Telstra)
Slide 26: Core Plus Office Fund (CPOF) Property Portfolio
Core Plus Office Fund (CPOF) Property Portfolio For personal use only 225 St Georges Tce St George Bank HQ (BHP) Sydney Perth WA $133.0m $76m (100% Ownership) (50% Ownership) Bank SA 167 Macquarie St Adelaide Sydney $20.0m $90.7m (100% Ownership) (100% Ownership) 34 Hunter St Sydney NSW $41m (100% O
Slide 27: Core Plus Office Fund (CPOF) Portfolio
Core Plus Office Fund (CPOF) Portfolio ASSET DIVERSIFICATION GEOGRAPHIC DIVERSIFICATION For personal use only By Value By Value 225 St Georges Northbank, Adelaide, 2.0%Tce, 6.3% 17.9% Kogarah, 12.9% QLD, 33.9% Stirling St, Stage 2, 6.9% 275 George St, 16.0% NSW, 47.6% Stirling St, 3.2% 34 Hunter, SA
Slide 28: Core Plus Industrial Fund (CPIF) Update
Core Plus Industrial Fund (CPIF) Update For personal use only • Fund established at 31 March 2007 with $350m in wholesale equity commitments • Gross asset capacity of $700m within current equity raising. Scope to increase capacity at future equity raisings • Unit Price Up-Lift at 30 June 2007 plus i
Slide 29: Core Plus Industrial Fund (CPIF) Update
Core Plus Industrial Fund (CPIF) Update For personal use only • Portfolio diversified across WA, QLD and VIC with a WALE of 14 years • Tenants include Coles Myer, Toll, Wesfarmers, Caterpillar, Kathmandu • Future acquisition pipeline significantly enhanced via deal-flow from CIP group Coles Regional
Slide 30: Core Plus Industrial Fund (CPIF) Property Portfolio
Core Plus Industrial Fund (CPIF) Property Portfolio For personal use only Coles Myer Distribution Toll, Viola Place 123 Kewdale Road Subject Site Centre Brisbane QLD Kewdale, Perth WA Perth WA $9.5m $32m End Value $133m (100% Ownership) (100% Ownership) (75% Ownership) Pinkenba, Wesfarmers, Geebung
Slide 31: Core Plus Industrial Fund (CPIF) Portfolio
Core Plus Industrial Fund (CPIF) Portfolio For personal use only ASSET DIVERSIFICATION GEOGRAPHIC DIVERSIFICATION By Value Coles, By Value 19.0% WA, 23.6% Toll, 1.4% Geebung, 1.1% Tullamarine, 3.5% Pinkenba, 3.3% Future, Future, 61.7% 61.7% Kewdale 4.6% Robinson, 2,6% QLD, 11.3% Richlands, 2.9% VIC,
Slide 32: Core Plus Retail Fund (CPRF) Update
Core Plus Retail Fund (CPRF) Update For personal use only • Fund to be established in FY 08 with target $350m in wholesale equity commitments • Scope to increase gross asset capacity at future equity raisings • Same structure and fee profile as successful CPIF capital raising • Seed portfolio of 14
Slide 33: Core Plus Retail Fund (CPRF) Update
Core Plus Retail Fund (CPRF) Update For personal use only • WALE of 9 years with asset diversity across Vic, NSW, QLD, WA and NZ • Major tenant covenants include Bunnings, Harvey Norman, Woolworths, Bev Marks, JB Hi-Fi, Nick Scali, Good Guys and Subaru etc • Strong management with Charter Hall bulky
Slide 34: Core Plus Retail Fund (CPRF) Property Portfolio
Core Plus Retail Fund (CPRF) Property Portfolio For personal use only Harvey Norman Mentone, Menai Central Harvey Norman Melbourne Vic Menai, Dunedin, $50m end value Sydney NSW New Zealand (50% Interest) $36.5m $18m (100% Interest) (100% Interest) Mentone Showrooms Foodtown Bunnings Melbourne, Vic A
Slide 35: Core Plus Retail Fund (CPRF) Property Portfolio
Core Plus Retail Fund (CPRF) Property Portfolio For personal use only Bunnings Bunnings SECTOR DIVERSIFICATION Box Hill, Kalgoorlie, By Value Melbourne Vic Western Australia (100% Interest) (100% Interest) Bulky 69.8% Retail 30.2% Bunnings Bunnings Stafford, Bendigo, Brisbane QLD Victoria (100% Inte
Slide 36: Core Plus Retail Fund (CPRF) Property Portfolio
Core Plus Retail Fund (CPRF) Property Portfolio For personal use only ASSET DIVERSIFICATION GEOGRAPHIC DIVERSIFICATION By Value ACT, 5.3% By Value Nunawading, HN Mentone, NZ, 9.1% 15.5% WA, 1.4% 100 12.1% Mentone Show, Menai, 8.8% 5.1% QLD, 27.7% NSW, 17.3% 50 Harvey Norman, East B Bendigo, 2.0% Dun
Slide 37: Diversified Property Fund (DPF) Update
Diversified Property Fund (DPF) Update For personal use only • 156% increase in AUM to $123m over FY07 • Significant enhancement in diversification as portfolio grows from 5 to 11 assets • Significant positive feedback from major and boutique financial planning groups • Average equity flows growing
Slide 38: Diversified Property Fund (DPF) Update
Diversified Property Fund (DPF) Update For personal use only • Quality portfolio of ASX listed, national and government tenant exposure • Portfolio has one of the longest WALE in the industry at 10.4yrs • Strong 8% cash distribution yield • On track to deliver on long term objective to outperform a
Slide 39: Diversified Property Fund (DPF) Property Portfolio
Diversified Property Fund (DPF) Property Portfolio For personal use only Coles Myer Distribution Corio Retail Centre South Centre Road & Jets Subject Site Centre Geelong VIC Court, Tullamarine VIC Perth WA $11.1m $10.7m $44.1m (100% Ownership) (100% Ownership) (25% Ownership, 75% CPIF) 400 Kent St M
Slide 40: Diversified Property Fund (DPF) Property Portfolio
Diversified Property Fund (DPF) Property Portfolio For personal use only ASSET DIVERSIFICATION GEOGRAPHICAL DIVERSIFICATION By Acquisition Price By Acquisition Price St Georges QLD VIC Tce, 12.4% Perth 4.0% 27.5% Airport, Mulgrave, 37.4% 4.8% St Pauls Tce, 4.0% Corio, 9.4% NSW WA 18.8% Tullamarine,
Slide 41: Charter Hall Opportunity Fund (CHOF) Update
Charter Hall Opportunity Fund (CHOF) Update For personal use only • FY 07 Deals Executed/Crystallised • 151 Pirie Street, gross equity IRR >50% • Northbank Plaza Brisbane, gross equity IRR >75% • CHOF 4 ($165m equity, $500m GAV capacity) Performance Update • On track to significantly outperform 20.0
Slide 42: Current Charter Hall Opportunity Fund (CHOF) Projects
Current Charter Hall Opportunity Fund (CHOF) Projects For personal use only 275 George Street, Brisbane Home HQ, North Shore, Sydney New 40,000sqm A-grade, 30-level office tower, Proposed 23,500sqm bulky goods retail 1,500sqm retail space and 240 car spaces. development over 3 levels and 550 car 80%
Slide 43: Financials
FINANCIALS For personal use only FULL YEAR FY2007 CHARTER HALL GROUP . FULL YEAR FY 07 RESULTS 43
Slide 44: Income Statement: FY07 vs FY06
Income Statement: FY07 vs FY06 For personal use only $ 000’s 1 FY07 FY06 Variance % Direct property net income 2 19,825 17,069 1. FY06 is a 12 month period to show like for like results. However the comparative period per the statutory Investment income 3 6,466 161 accounts includes 25 days in June
Slide 45: Reconciliation of Underlying EPS to DPS
Reconciliation of Underlying EPS to DPS 1. AIFRS EPS adjusted for AIFRS non cash expenses For personal use only being mainly the share based remuneration expense FY07 Cps and the tax expense on the unrealised gain in the investment in Axiom Properties Limited Underlying EPS 1 9.51 2. 18m securities
Slide 46: Balance Sheet: June 2007 vs December 2006
Balance Sheet: 30 June 2007 vs 31 December 2006 For personal use only $ 000’s 30/6/07 31/12/06 Variance Current assets 1 53,930 21,693 31,596 1. Increase mainly due to cash on hand as a result of placement proceeds (since utilised) Non current assets 2 596,448 404,502 192,587 2. Increase due to dire
Slide 47: Wrap-up
WRAP-UP For personal use only FULL YEAR FY07 CHARTER HALL GROUP . FULL YEAR FY 07 RESULTS 47
Slide 48: FY 2007
FY 2007 For personal use only • Strong ROE focus of CHC management rewarded with out performance of funds and significant new equity raisings • Access to different sources of equity evidenced by c. 40% new investors in wholesale funds • Increased focus on retail funds will further diversify sources