Charter Hall Group · ASX:CHC
Charter Hall — FY2023 Earnings Presentation
43 slides from Charter Hall's earnings presentation, Aug 21, 2023
Slide 1: Charter Hall Group 2023 Full Year Results
Charter Hall Social Infrastructure REIT Charter Hall Group 2023 Full Year Results 2023 Full Year Results
Slide 2: Acknowledgement of Country
Acknowledgement of Country Charter Hall acknowledges the Traditional Custodians of the lands on which we work and gather. We pay our respects to Elders past and present and recognise their continued care and contribution to Country. Charter CharterHall HallLong GroupWALE REIT 2022 Full Year Results
Slide 3: Agenda
Agenda 1. Highlights and Strategy 2. Group Funds Management 3. Property Investment 4. Financial Result 5. Guidance 6. Additional Information Cover image: Midwest Logistics Hub, Truganina (CPIF) Left image: 555 Collins Street, Melbourne (CPOF) Charter Hall Group 3 2023 Full Year Results
Slide 4: Highlights and Strategy
1 Highlights and Strategy Light Horse Logistics Hub, Eastern Creek (CPIF) CharterHall Charter HallGroup Group Charter Hall Group 2023 2023Full HalfYear YearResults Results 2023 Full Year Results
Slide 5: Group highlights
Highlights and Strategy Group highlights1 Group Returns Property Investments Funds Management Investment Capacity Operating earnings Property Investment portfolio Group FUM4 Group investment capacity 6 $441 million $3.0bn $87.4bn ↑ 9.4% $6.0bn Statutory profit 2 Property FUM $196 million $71.9bn ↑ 9
Slide 6: Our Strategic Pillars
Highlights and Strategy Our Strategic Pillars1 We use our expertise to access, deploy, manage and invest equity to create value and generate superior returns for our investor customers Access Deploy Manage Invest Accessing equity from listed, Creating value through attractive Funds management, asset
Slide 7: Operating earnings growth
Highlights and Strategy Operating earnings growth Operating earnings and distributions per security growth - Strength of underlying retained earnings driving fund creation and growth OEPS (post-tax) cps - Consistent DPS growth of 7.7% from FY13 to 115.6cps FY23 DPS (cash paid) - Cumulative retained
Slide 8: Annuity revenue growth
Highlights and Strategy Annuity revenue growth Incremental EBIT margin expansion has been delivered in aggregate over the long term - Annuity revenues are more than 2X net $407.5m 10 Year CAGRs: operating expenses whilst operating revenue is 5X operating expenses Annuity Revenue1 16.7% 2 Other Reven
Slide 9: Group Funds Management
CharterHall Charter 2023 HallGroup 2023Full Group FullYear Half YearResults Year Results Results 2 Group Funds Management 555 Collins Street, Melbourne (CPOF)
Slide 10: Group funds management portfolio
Group Funds Management Group funds management portfolio Diversification of equity sources and by sector Group FUM by equity source Group FUM by sector SC Retail Social Infrastructure $4.3bn $3.7bn 4.9% Direct (Unlisted) Equity Wholesale (Unlisted) Equity 4.2% $10.8bn $63.3bn 12.4% 72.4% Industrial &
Slide 11: Funds Under Management (FUM) growth
Group Funds Management Funds Under Management (FUM) growth Property FUM growth of 9.5% from $65.6bn to $71.9bn Property FUM growth ($bn) Property FUM by equity source ($bn) 80.0 5-year Property FUM CAGR of 25.4% $7.6bn ($2.8bn) 75.0 $71.9bn $3.0bn Wholesale 24.7% ($1.6bn) 70.0 Listed 25.0% $65.6bn $
Slide 12: Property funds management portfolio
Group Funds Management Property funds management portfolio Largest diversified property portfolio in Australia Portfolio value Lettable area No. of Net rent WARR1 WALE Occupancy WACR Property FUM ($bn) (m sqm) Properties ($m) (%) (years) (%) (%) 30 June 2023 71.9 12.9 1,663 3,252 3.7 8.2 97.9 4.76 3
Slide 13: Diversified tenant customers
Group Funds Management Diversified tenant customers The top 20 tenants are represented by Government, multinationals & listed companies – The top 20 tenants represent 56% of property platform income – 26% of platform leases are NNN and 21% of platform net income is CPI-linked – 72% repeat tenants an
Slide 14: Leasing success – Office
Group Funds Management Leasing success – Office Strong leasing momentum with 388,824 sqm leased2 across 222 transactions – 6.9 year WALE achieved on all transactions nationally – 96.3% office portfolio occupancy versus national average of 85.1%1 – CPOF continues to have leading sector occupancy at 9
Slide 15: Leasing success – Industrial & Logistics
Group Funds Management Leasing success – Industrial & Logistics Strong leasing momentum with 990,381 sqm leased across 82 transactions – 6.0 year WALE achieved on all transactions nationally – 99.1% Industrial & Logistics portfolio occupancy – 10.1 year WALE across our Industrial & Logistics portfol
Slide 16: Equity inflows
Group Funds Management Equity inflows1 ($m) FY20 FY21 FY22 FY23 - Diverse sources of equity across Wholesale, Listed and Direct Wholesale pooled funds 1,272 2,111 1,575 817 - Wholesale flows weighted towards partnerships Wholesale partnerships 1,298 1,448 1,137 1,432 - ~100 wholesale investors Liste
Slide 17: FY23 property transaction activity
Group Funds Management FY23 property transaction activity $10.4bn of transaction activity, comprising over 90 transactions with 25 active funds/partnerships Social Industrial & Long WALE Shopping Office Infrastructure / Total Logistics Retail Centre Retail Other Acquisitions ($bn) 3.4 0.4 3.5 0.3 0.
Slide 18: Development to drive deployment and FUM growth
Group Funds Management Development to drive deployment and FUM growth Development completions of $3.1bn over the last 12 months – 95% of Industrial committed projects are pre-leased – 73% of Office committed projects are pre-leased1 Completion value ($m) Completions Committed Uncommitted Total (last
Slide 19: Property Investment
3 Property Investment Midwest Logistics Hub, Truganina (CPIF) CharterHall Charter HallGroup Group Charter Hall Group 2023 2023Full HalfYear YearResults Results 2023 Full Year Results
Slide 20: Property Investment portfolio
Property Investment Property Investment portfolio Property Investment portfolio now $3.0bn Portfolio Value No. of WALE Occupancy WARR1 WACR WADR ($bn) Properties (years) (%) (%) (%) (%) 30 June 2023 3.0 1,576 7.4 97.6 3.6 4.91 6.1 30 June 2022 2.9 1,462 8.2 97.3 3.6 4.55 5.8 Sector allocation Geogra
Slide 21: Property Investment Portfolio growth
Property Investment Property Investment Portfolio Property Investment portfolio yield: 4.4% growth - Net investments of $271m since June 2022 10.0% - Investment portfolio 5-year CAGR of 11.6% p.a. $2,918m $2,951m - Retained earnings driving co-investments and supporting new fund creation 8.0% $2,409
Slide 22: Diversified Property Investment earnings
Property Investment Diversified Property Investment earnings Property Investment earnings (by sector) - Property Investment portfolio provides growth SC Retail and resilience given quality and strong tenant 10% Industrial & Logistics customer composition 13% Social Infrastructure - No single asset i
Slide 23: ESG Leadership
Property Investment ESG Leadership Achievements in FY23 Focus areas in FY24+ Environment Net Zero Carbon Targets Investment in clean energy ESG performance supporting Climate Action Established near-term and long-term Long Term PPA to supply 100% renewable sustainable finance Continued focus on part
Slide 24: Financial Result
CharterHall Charter 2023 HallGroup 2023Full Group FullYear Half YearResults Year Results Results 4 Financial Result Geoscience Australia, Canberra (CLW, CQE & DIF4)
Slide 25: Earnings summary
Financial Result Earnings summary ($m) FY22 FY23 Change % PI EBITDA 142.9 137.5 (3.8%) DI EBITDA 35.5 36.0 1.4% - OEPS (post tax) of 93.3cps compared to FM EBITDA 1,2 552.2 423.3 (23.3%) 115.6cps in the prior comparable period EBITDA 730.5 596.8 (18.3%) - PI EBITDA decreased by 3.8% as a result of D
Slide 26: Funds management
Financial Result Funds management ($m) FY22 FY23 Change % Fund management revenue 255.2 306.3 20.0% Transaction and performance revenue 372.0 165.7 (55.5%) - Funds management revenue growth of 20% 627.2 472.0 (24.7%) Investment management revenue continues to outpace operating expense growth Propert
Slide 27: Balance sheet and return metrics
Financial Result Balance sheet ($m) 30 Jun 2022 30 Jun 2023 and return metrics Cash Property investment 595 2,918 401 2,951 Development investment 78 131 - NTA per security growth of 0.4% since June Receivables 110 140 2022 to $6.28 Other assets1 308 314 - Balance sheet gearing of 2.2% post Intangib
Slide 28: Platform capital profile
Financial Result Platform capital profile Funds platform debt metrics1 30 Jun 2022 30 Jun 2023 Total facility limits ($m) 25,089 29,068 Total undrawn debt ($m) 6,605 5,171 - $6.0bn of available liquidity plus committed and uncalled equity Total cash ($m) 1,338 852 - $7.4bn of new and refinanced debt
Slide 29: Guidance
5 Charter Hall Group Artist’s Guidance Multi Level Logistics Complex impression – Ascent on Bourke, Alexandria, Sydney (CLP) 2022 Half Year Results Charter Hall Group Charter Hall Group 2021 Full Year Results 2023 Full Year Results
Slide 30: FY24 operating earnings guidance
Guidance FY24 operating earnings guidance Based on no material change in current market conditions, FY24 guidance is for post-tax operating earnings per security of approximately 75 cents. FY24 distribution per security guidance is for 6% growth over FY23. 60 King William Street, Adelaide (CPOF & 60
Slide 31: Additional Information
CharterHall Charter 2023 HallGroup 2023Full Group FullYear Half YearResults Year Results Results 6 Additional Information Charter Hall Offices, 130 Lonsdale Street, Melbourne (CPOF)
Slide 32: Management bench experience
Additional Information Management bench experience Charter Hall Executive Committee (EXCO) David Harrison Managing Director & Group CEO 36 years industry experience Sean McMahon Russell Proutt Carmel Hourigan Richard Stacker Natalie Devlin Ben Ellis Steven Bennett Chief Investment Chief Financial Of
Slide 33: Property Platform
Additional Information Charter Hall Group Property Platform1 0.1bn $ $ 11.9bn $ 5.0bn 3.1bn $ 30.2bn $ 0.7bn $ 19.3bn $ $0.6bn Charter Hall Group 1. Excludes Maxim and other smaller investments 2023 Full Year Results 33
Slide 34: Charter Hall managed funds
Additional Information Charter Hall managed funds Listed Industrial Social SC Long WALE Retail Office Equities / & Logistics Infrastructure Retail Other $24.5bn $9.7bn $29.3bn $3.7bn $4.3bn $16.0bn Wholesale 1 4 6 7 10 Australian CPIF CLP LWHP LWIPs LEP CPOF CHOT BSWF CHET DVP2 CPRF (Unlisted) Equit
Slide 35: Wholesale pooled and partnerships property funds
Additional Information Wholesale pooled and partnerships property funds FUM Gearing $ 48.1bn 32.1% Occupancy WALE 97.2% 7.7yrs Cap rate CHC investment 4.61% $ 1.7bn Southern Cross West Tower, 111 Bourke Street, Melbourne (CPOF) Charter Hall Group 35 2023 Full Year Results
Slide 36: Major wholesale property investment portfolio returns
Additional Information Major wholesale property investment portfolio returns Relative to sector specific IPD/MSCI Core Wholesale indices – Average outperformance of major wholesale property investment against their respective MSCI/IPD sector indices by 1.5x 17.1% 17.2% 14.0% 14.3% 14.3% 12.5% 11.2%
Slide 37: Listed
Additional Information Listed FUM Gearing1 $ 13.3bn 31.4% Occupancy WALE 99.1% 10.0yrs Cap rate CHC investment2 5.06% $ 0.8bn TAFE Robina, 209 Robina Town Centre Drive, Robina (CQE & CHDLWF) 1. Reflects aggregate balance sheet gearing of all listed REITs 2. Held at accounting value not market value
Slide 38: Charter Hall Direct
Additional Information Charter Hall Direct FUM Gearing $ 10.5bn 38.0% Occupancy WALE 99.2% 7.6yrs Cap rate CHC investment 5.04% $ 0.4bn 913 Whitehorse Road, Box Hill (CLW & DOF) Charter Hall Group 38 2023 Full Year Results
Slide 39: Direct funds have returned an average of 10.6% p.a. since inception
Additional Information Direct funds have returned an average of 10.6% p.a. since inception 25% 20% 16.7% 14.5% 15% 12.3% 12.3% 10.7% 10% 8.9% 8.7% 7.6% 7.7% 7.7% 8.0% 7.6% 6.1% 5.8% 5.5% 5% 4.2% 3.8% 0.5% - DOF 3 PFA 3 DIF3 3 DIF4 BW Trust LWF WPS1 WPS2 Maxim 4 2014-2023 2017-2023 2014-2023 2016-202
Slide 40: CHPT Property Investment portfolio
Additional Information CHPT Property Investment portfolio Charter Hall Charter Hall Ownership stake Investment PI Income WALE WACR WADR WARR1 PI Yield2 (%) ($m) ($m) (years) (%) (%) (%) (%) Industrial & Logistics Charter Hall Prime Industrial Fund (CPIF) 1.3 121.0 4.5 10.2 4.2 6.1 3.3 3.6 Charter Ha
Slide 41: Major performance review testing periods
Additional Information Major performance review testing periods Fund Testing frequency Charter Hall Direct BW Trust (BW Trust) FY24 Core Logistics Partnership (CLP) 3 yearly - FY24, FY27, etc plus individual asset divestments FY24 Charter Hall Prime Office Fund (CPOF) 3 yearly – FY24, FY27, etc Coun
Slide 42: Fund key and glossary
Additional Information Fund key and glossary Listed entities Wholesale funds ASX:CHC Charter Hall Group BSWF Brisbane Square Wholesale Fund ASX:CLW Charter Hall Long WALE REIT CCT Charter Hall Counter Cyclical Trust ASX:CQR Charter Hall Retail REIT CHAB247 Charter Hall Abacus 247 Adelaide Street Tru
Slide 43: Further information
Further information Investor Relations Tel 1300 365 585 (within Australia) +61 2 8651 9000 (outside Australia) Email reits@charterhall.com.au Presentation authorised by the Board charterhall.com.au/chc IMPORTANT NOTICE & DISCLAIMER This presentation has been prepared by Charter Hall Funds Management