Charter Hall Group · ASX:CHC
Charter Hall — H1 2006 Earnings Presentation
61 slides from Charter Hall's earnings presentation, Feb 16, 2006
Slide 1: ASX cover letter: Interim results period ended 31 December 2005
CHARTER HALL 16 February 2006 The Manager Company Notices Section Australian Stock Exchange Limited Exchange Centre 20 Bridge Street SYDNEY NSW 2000 Dear Sir INTERIM RESULTS — PERIOD ENDED 31 DECEMBER 2005 Please find attached Media Release, Appendix 4D and statutory financial statements and results
Slide 2: Media Release: Interim results in line with forecast
MEDIA RELEASE CHARTER HALL CHARTER HALL GROUP ANNOUNCES INTERIM RESULTS IN LINE WITH FORECAST Thursday 16" February, 2006 stapled security. ith the compa s for new investrient func market pe which has dri Charter Hall Limited ABN 57 113 531 150 Charter Hatt Funds Management Limited ABN 31 082 991 78
Slide 3: Media Release
MEDIA RELEASE CHARTER HALL arty F Ve beer ne property portfc orn has be palth luding major tena ank of AK Witlis Ai 4 on 26 with tote °F has contra w vil inc
Slide 4: Media Release
MEDIA RELEASE CHARTER HALL 2005 and will become the prin itrnants, Including < 3 ment by € the fur ari) Coles Super 5 temporarily quisition of the Atriurn property at Pyrmont. itioning within the jal to enharice returns on sha a nator S for prop rv of new assets ois in the vari Sroup will continue t
Slide 5: Media Release: contacts and about Charter Hall Group
MEDIA RELEASE CHARTER HALL Notes ENDS For more information contact: Charter Hall Group David Southon David Harrison Nathan Francis Susannah Yeung Joint CEO Joint CEO Chief Financial Officer Marketing and Communications 02 8908 4025 02 8908 4033 02 8908 4073 Manager davids@charterhali.com.au davidh@c
Slide 6: Appendix 4D - Half Year Report
APPENDIX 4D — HALF YEAR REPORT PERIOD ENDED 31 DECEMBER 2005 Charter Hall Group (CHCCA) ~ comprising the stapling of ordinary shares in Charter Hall Limited (ACN 113 531 150) and units in Charter Hall Property Trust (ARSN 113 339 147} 1. Reporting period Half year report for the period 24 March 2005
Slide 7: Entities controlled; distributions
Entities over which control has been gained or lost during the period As foreshadowed in the PDS/Prospectus, at allotment (6 June 2005), Charter Hall Limited acquired Charter Hall Holdings Pty Limited and its subsidiaries. Charter Hall Diversified Property Fund (“CHDPF”) became a controlled sub-trus
Slide 8: Interim Financial Report contents
CHARTER HALL GROUP INTERIM FINANCIAL REPORT COMPRISING CHARTER HALL LIMITED AND ITS CONTROLLED ENTITIES FOR THE PERIOD 24 MARCH 2005 TO 31 DECEMBER 2005 Contents DIRECTORS’ REPORT.....csssssssssssssssssssssssssssssssscssssscssenstonssenstonsnstsnstsnutunensssnssssssensesseceescessssestenssenstsnssns
Slide 9: Directors' Report
Charter Hall Group Directors’ Report Charter Hall Group comprises Charter Hail Limited (the Company) and its controlled entities, which include Charter Hail Funds Management Limited as the Responsible Entity of Charter Hall Property Trust (the Trust). Charter Hall Limited and Charter Hall Funds Mana
Slide 10: Directors' Report: Results
Charter Hall Group Directors’ Report {continued} Results The Group has reported a solid financial result for the period to 31 December 2008, its first as a listed entity. The results have been reported under Australian equivalents to International Financial Reporting Standards (IFRS). As widely repo
Slide 11: Directors' Report: Reconciliation of financial results
Charter Hall Group Directors’ Report {continued} Reconciliation of financial results The table below reconciles profit after tax for the period 1 July 2005 to 31 December 2005 to the actual reported result per the statutory accounts being the period 6 June 2005 to 31 December 2005. $m Notes Actual N
Slide 12: Directors' Report: DRP and review of operations
Charter Hall Group Directors’ Report {continued} Distribution Re-investment Plan The Group activated its DRP for the first time for the 31 December 2005 distribution. The participation rate was 71.7%. This equates to an equity raising of $7.2m, which will be used to fund further growth for the Group
Slide 13: Auditor's independence declaration
Charter Hall Group Directors’ Report {continued} PRICEWATERHOUSE(COPERS Auditor’s independence declaration As lead auditor for the review of Charter Hall Group for the period ended 31 December 2005, | declare that to the best of my knowledge and belief, there have been: a) no contraventions of the a
Slide 14: Consolidated Income Statement
Charter Hall Group Consolidated Income Statement For the period 24 March 2005 to 31 December 2005 Consolidated 24 March 2005 to Notes 31 December 2005 $’000 Revenue from continuing operations 16,808 Investment property expenses (2,502) Employee benefits expenses (2,748) Depreciation {A7) Finance cos
Slide 15: Consolidated Balance Sheet
Charter Hall Group Consolidated Balance Sheet As at 31 December 2005 Consolidated Notes 31 December 2005 $'000 ASSETS Current assets Cash and cash equivalents 8,315 Receivables 69,915 Other assets 5,114 Total current assets 83,344. Non-current assets Investments accounted for using the equity method
Slide 16: Consolidated Cash Flow Statement
Charter Hall Group Consolidated Cash Flow Statement For the period 24 March 2005 to 31 December 2005 Consolidated 24 March 2005 to Notes 31 December 2005 $'000 Cash flows from operating activities Receipts from customers 47,227 Payments to suppliers and employees (9,115) Interest received 1,537 Inte
Slide 17: Consolidated Statement of Changes in Equity
Charter Hall Group Consolidated Statement of Changes in Equity For the period 24 March 2005 to 31 December 2005 Total equity at the beginning of the period Cash flow hedges Net loss recognised directly in equity Loss for the period Total loss for the period and net loss recognised directly in equity
Slide 18: Notes to the Financial Statements
Charter Hall Group NOTES TO THE FINANCIAL STATEMENTS PERIOD ENDED 31 DECEMBER 2005 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This general purpose financial report for the reporting period ended 31 December 2005 has been prepared in accordance with Accounting Standard AASB 134, Interim Financial
Slide 19: Notes to the Financial Statements
Charter Hall Group NOTES TO THE FINANCIAL STATEMENTS PERIOD ENDED 31 DECEMBER 2005 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (c) SEGMENT REPORTING A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns th
Slide 20: Notes to the Financial Statements
Charter Hall Group NOTES TO THE FINANCIAL STATEMENTS PERIOD ENDED 31 DECEMBER 2005 (ii) Investment properties under development Investment properties under development are valued at the lower of cost and recoverable amount. An independent valuation is undertaken at practical completion of each inves
Slide 21: Notes to the Financial Statements
Charter Hall Group NOTES TO THE FINANCIAL STATEMENTS PERIOD ENDED 31 DECEMBER 2005 (m) LEASE INCENTIVES Prospective lessees may be offered incentives as an inducement to enter into non-cancellable operating leases. These incentives may take various forms including, up front cash payments, rent free
Slide 22: Notes to the Financial Statements
Charter Hall Group NOTES TO THE FINANCIAL STATEMENTS PERIOD ENDED 31 DECEMBER 2005 Cash flow hedge The effective portion of changes in the fair vaiue of derivatives that are designated and qualify as cash flow hedges is recognised in equity in the hedging reserve. The gain or loss relating to the in
Slide 23: Notes to the Financial Statements
Charter Hall Group NOTES TO THE FINANCIAL STATEMENTS PERIOD ENDED 31 DECEMBER 2005 {s) EARNINGS PER SECURITY (i) Basic earnings/(loss) per stapled security Basic earnings per stapled security is determined by dividing the net profit/(loss} after income tax attributable to the stapled security holder
Slide 24: Notes: Dividends/Distributions
Charter Hall Group NOTES TO THE FINANCIAL STATEMENTS PERIOD ENDED 31 DECEMBER 2005 3. DIVIDENDS/DISTRIBUTIONS Dividends/distributions recognised in the current period are: December Payment Total Amount Date of Tax rate for Percentage 2005 per $’000 Payment Franking or Franked % Share/Unit Approximat
Slide 25: Notes: Equity
Charter Hall Group NOTES TO THE FINANCIAL STATEMENTS PERIOD ENDED 31 DECEMBER 2005 Consolidated Notes 24 March 2005 to 31 December 2005 $’000 4. EQUITY Capital and Reserves attributable to stapled security holders as: Equity holders of Charter Hall Limited Contributed equity 2,544 Reserves Aa) (51,9
Slide 26: Notes: Contingent liabilities and segment reporting
Charter Hall Group NOTES TO THE FINANCIAL STATEMENTS PERIOD ENDED 31 DECEMBER 2005 6. CONTINGENT LIABILITIES Details and estimated maximum amounts of contingent liabilities (for which no amounts are recognised in the financial statements) are as follows: The consolidated entity has given a bank guar
Slide 27: Directors' Declaration
Charter Hall Group Directors’ Declaration For the period ended 31 December 2005 In the directors’ opinion: (a) the financial statements and notes set out on pages 3 to 19 are in accordance with the Corporations Act 2001, including: (i) complying with Accounting Standards, the Corporations Regulation
Slide 28: Independent review report
Charter Hall Group PRICEWATERHOUSE( COPERS Independent review report to the stapled security holders of Charter Hall Group Statement Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the financial report of Charter Hall Group (the Group}: .
Slide 29: Independent review report (continued)
Charter Hall Group Our procedures include reading the other information included with the financial report to determine whether it contains any material inconsistencies with the financial report. These procedures do not provide all the evidence that would be required in an audit, thus the level of a
Slide 30: Charter Hall Group Half Year Results 2006
Slide 31: Contents
CONTENTS v HALF YEAR SUMMARY v PROPERTY TRUST UPDATE v FUNDS UPDATE ¥ HALF YEAR FINANCIALS v APPENDIX CHARTER HALL #22,
Slide 32: Summary
SUMMARY v Results on track v New funds launched ¥ New assets acquired ¥ New projects secured v New leases signed CHARTER BALL ?
Slide 33: Key Events Since IPO
KEY EVENTS SINCE IPO FEB s House office as Cap Core Plus Office Fund’ === a Diversified Property Fund Wholesale (nefitutional) jundlaunched wih $4.7m office aosel acaiiied al Brisbane ou roject secured (154m end value) 2006 $1 07m seed asset fringe office ae Anon Ges 5 Byrncnt) Core Plus Office Fund
Slide 34: Financial Highlights
FINANCIAL HIGHLIGHTS ON 30 DEC 05 Listing price 10 Jun 05! DPU (per stapled security)? 47" installment only ~ 2" installment payable 30 gun 05 2 Includes $66m second installment 3 Period 6 Jun 05 (allotment) to 31 Dec 05 CHARTER BALL #4.
Slide 35: CHCCA Security Price Movement
CHCCA SECURITY PRICE MOVEMENT Core Plus Office Fund launched 130, i AMEX lease signed at Atrium 125 4 Willis lease signed at i Diversified Property Fund launched Bourke Street ' 120 4 115 4 Entry into S&P / ASX 300 110 4 . CHOFS raised Indexed to 100 105 4 90 T T T Charter Hall Group LPT ASX 300 09-
Slide 36: Assets Under Management
ASSETS UNDER MANAGEMENT v¥ 50% increase in core investment AUM since IPO Y CHG well positioned to source acquisitions: 15 assets totalling $508m were acquired over last 12 months, 100% off-market Current AUM 1,250 $1,163m « Opportunistic Assets (completion value} é @ Core Investment Assets 1998 1999
Slide 37: CHG Product Suite
CHG PRODUCT SUITE ¥ CHARTER HALL OPPORTUNITY FUND 4 [lv CHARTER HALL PROPERTY TRUST (CHOF 4) (CHPT) vy PROPERTY DEVELOPMENT PORTFOLIO v_ DIVERSIFIED PROPERTY FUND (DPF) 283 (PDP 2&3) ¥ CHARTER HALL INVESTMENT FUNDS (CHIF 1-6) v CORE PLUS OFFICE FUND (CPOF) * CHARTER HALL ? * CPOF equity raising curr
Slide 38: CHG Products Span Entire Risk/Return Spectrum
CHG PRODUCTS SPAN ENTIRE RISK/RETURN SPECTRUM CHG PRODUCTS CHARTER HALL OPPORTUNISTIC) CORE PLUS DPF CHPT CPOF * CHIF 1-6 CHOF 4 PDP 1,23 (JV with AMP) 70% pace property assets / Fase veces 3% eplianced felum ivesitents [or ong ey ownership. Retail tutional Insiiutional * CPOF equity raising curreni
Slide 39: Property Trust Update
Slide 40: Property Trust (CHPT)
PROPERTY TRUST (CHPT) v WALE increased to 6.1 years from PDS 5.2 years’? ¥ Occupancy increased to 95% (100% including income support) Y All properties performing well ¥ Pre-leasing at Nunawading on track — rents and tenant quality mix ¥ CHPT to hold approx 20% stake in CPOF* and DPF 1 Assumes rent g
Slide 41: Property Trust (CHPT): diversification
PROPERTY TRUST (CHPT) ¥ Strong asset diversification and quality tenant composition Bourke 20.8% Kent 8.1% DPF 3% a CPOF 9.4% Mentone 17.8% Nunawading 22.9% ASSET DIVERSIFICATION by Acquistion Price NOTE: Graphs include 20% of Atrium (AMEX) and CHPT’s 20% of DPF portfclio CHARTER BALL ? a Industrial
Slide 42: Property Trust (CHPT): lease expiry profile
PROPERTY TRUST (CHPT) LEASE EXPIRY PROFILE BY NET INCOME 50% ciNunawading & Mentone represent uncommitted tenancies. 40% w Wilson Parking 30% Lease Expiry Profile 20% 10% 0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 ope [Fee 57 <* [A Mentone |) 71 Nunawading [iz
Slide 43: Property Trust (CHPT): Home HQ Nunawading
PROPERTY TRUST (CHPT) HOME HQ NUNAWADING Y To be completed in August 2006 ¥ CHPT continues to receive 7.5% coupon on all funds drawn until completion plus a rent guarantee applies for 6 months post completion on 15% of GLA v Leasing progressing well - leases signed with 3 anchor “bookend” tenants in
Slide 44: Property Trust (CHPT): Mentone
PROPERTY TRUST (CHPT) MENTONE Y Application for rezoning approved by VCAT and subsequently supported by Council. Development permit application submitted ¥ Subject to final development permit and Nylex remediation and relocation, development likely to start on programme in Q1 FY07 v Pre-leasing to c
Slide 45: Property Trust (CHPT): Bourke Street, 400 Kent Street
PROPERTY TRUST (CHPT) 570 BOURKE STREET ¥ Willis Australia signed lease over levels 3, 4 & 5 Y Victorian Government signed lease over part of level 20 and HoA for balance of level 20 ¥ Occupancy level 100% 400 KENT STREET v Fit-out works by Central QLD University completed CHARTER BALL », 6
Slide 46: Funds Update
Slide 47: CHOF
CHOF 4 ¥ Launched in July 2005 after being significantly oversubscribed Y Raised $165m of equity - largest opportunity fund in Australia Y Capacity created for over $500m of project end value ¥ 2 projects in Brisbane underway with total end value of approx $160m v Balance of equity to be allocated o
Slide 48: CHOF: Northbank Plaza and 420 George Street
CHOF 4 PROJECT 1: NORTHBANK PLAZA, BRISBANE (STAGE 1) v¥ Refurbishment of existing 26,000sqm office building 50/50 JV with local development & investment group Indigo v ¥ Completion Value $134m, Completion Date late 2007 v Stage 2 (adjacent site co-owned by CHOF 4) under investigation for a new A-gr
Slide 49: PDP Funds
PDP FUNDS v Performance fees forecast in Prospectus/PDS for FY06 have been achieved (75% of Atrium fee recognised in Jan 06, 25% in FY07) ¥ PDP 2: Atrium Pyrmont sold to CHG’s CPOF for $137m v PDP 2: Bourke Street Alexandria sold to owner occupier v PDP 3: Zone Site 5, Sydney Olympic Park pre-leased
Slide 50: Diversified Property Fund
DIVERSIFIED PROPERTY FUND ¥ Launched in September 2005 Y Current AUM $48m comprising 5 assets in 4 states, NSW, QLD, WA and VIC Y Targeting asset size in $5-30m price bracket ¥ Open-ended fund with strong potential for growth — primary vehicle for CHIF AUM growth v CHG receives acquisition, funds ma
Slide 51: Diversified Property Fund: diversification
DIVERSIFIED PROPERTY FUND v Good asset diversification and quality tenant composition St Georges Tce WA Oher Perth CBD 90.5% 30.5% ab “ 87% Mulgrave Melb Metro 9.8% 11.9% Natonal, Internati & St Pauls Tce neal Brisbane Fringe ain Gov't Kent St 64.9% Related 98% Sydney CBD ela NSW 26.4% 27% vic 24.7%
Slide 52: Core Plus Office Fund (CPOF)
CORE PLUS OFFICE FUND (CPOF) v Launched in December 2005 and $137m seed asset acquired ¥ Open-ended fund targeting institutional investors Y Target raising $250-500m of equity providing up to $1,100m asset capacity v Fund to hold primarily passive and some assets with enhanced component ¥ Annual fun
Slide 53: Core Plus Office Fund (CPOF): seed asset
CORE PLUS OFFICE FUND (CPOF) SEED ASSET ¥ $137m, 20,000sqm Atrium acquired from PDP 2 v Pre-leased to AMEX and Coles Supermarket ¥ Located in Pyrmont on Sydney's CBD fringe ¥ Stable, secure and growing distribution yields v A-Grade office building with retail area & parking v Under construction unti
Slide 54: Half Year Financials
Slide 55: Financials: income statement
FINANCIALS INCOME STATEMENT ($000’s) 6 mths to 31 Dec 05 Net Rental Income 5,766 Income guarantee on rental income 600 Management fee income! §,065 interest Income 1,136 (OOF COT enn 687 Total income 13,254 Operating expenses (3,813) Re (1,671) Total expenses (5,484) Net profit before tax 7,770 Tax?
Slide 56: Financials: balance sheet
FINANCIALS BALANCE SHEET ($000’s) Current assets 83,344 Non current assets 251 386 “Total a 334,730 Current liabilities 24,112 Non current liabilities 418,587 a Tg 1a608 Equity 192,031 Property investments $240,088 Borrowings $116,666 Gearing ' 34.9% Securities on issue 270,279 Securities on issue e
Slide 57: Capital Management
CAPITAL MANAGEMENT Facility limit $225m “Amount drawn at 31 December 2005 re $1 17m (or 52%) “Average amount drawn for the period ne 44m ~ cd compen ~ Weighted average maturity ~ facilities 3 year evergreen “Waghs ay elon nnn insite innit = _ Wlghtodawagehesas nr a Woe vorsge ere - Leeann intensitie
Slide 58: Appendix
Slide 59: Charter Hall Group
CHARTER HALL GROUP BOARD OF DIRECTORS 2 Executive (Andre Biet and Cedric Fuchs), 2 Non-executive, 4 Independent Stapled & Managed via Responsible Entity Eh CHARTER HALL FUNDS MANAGEMENT LTD CHARTER HALL PROPERTY TRUST CHARTER HALL LIMITED Joint CEO Joint CEO David Harrison David Southon PROPERTY PRO
Slide 60: New Products Since IPO
NEW PROD Opportunity Fund 4 (CHOF 4) Core Plus Office Fund (CPOF) Diversified Property Fund (DPF) CHARTER BALL HAL? ¥ : oe ising O 0 to be Cuvently being raised UCTS SINCE IPO tobe” identified | Seed asset acguired management a Properly development, _ ~ late! Equily ne a ck bon of one oo ae vo Eauly
Slide 61: Existing Products at IPO
EXISTING PRODUCTS AT IPO Property Development Portfolio 1,283 (PDP 12,3) lvesied wih 2. Investment CL i Le Al funds that have. come up for revi ew have been rolled Funds ‘ | : _ o7 PNW investors, exclusive offers, 11 assels in total (CHIE 1-6, a a Under wioor) ie id tenant covenants, Australia wide.