Charter Hall Retail Reit · ASX:CQR
Charter Hall Retail Reit — FY2014 Earnings Presentation
43 slides from Charter Hall Retail Reit's earnings presentation, Aug 20, 2014
Slide 1: 2014 Full Year Results
20 August 2014 Charter Hall Retail REIT For personal use only 2014 2014Full FullYear YearResults Results
Slide 2: Agenda
Charter Hall Retail REIT Agenda For personal use only Scott Dundas Philip Schretzmeyer Fund Manager Deputy Fund Manager 1 Full Year Results 2 Portfolio Investments 3 Australian Operational Performance 4 Financial Performance 5 Strategy and Outlook 1
Slide 3: Full Year Results
For personal use only Full Year Results
Slide 4: Key Achievements
Charter Hall Retail REIT Key Achievements For personal use only Operating earnings 20% increase in NTA up 2.4% to 29.60 cpu Australian portfolio to $3.40 pu 3.0%1 growth $2.0 billion $252 million of Balance sheet gearing Occupancy increased acquisitions down 6.6% to 33.2%2 to 98.5% completed 1. Oper
Slide 5: Highlights
Charter Hall Retail REIT Highlights For personal use only Strategy Achievements Active Management • Occupancy improved to 98.5% • Specialty rent growth of 2.6% achieved from 179 renewals and 1152 new leases • Same property NOI growth of 2.0% Enhancing the portfolio • Portfolio now valued at $2.0 bil
Slide 6: Financial results – full year ended June 2014
Charter Hall Retail REIT Full Year Results Financial results – full year ended 30 June 2014 For personal use only Key metrics FY14 FY13 Movement Statutory profit $85.2m $52.6m +62.0% Operating earnings1 $105.3m $93.1m +13.1% Operating earnings1 per unit 29.60 cents 28.74 cents +3.0% Distributions pe
Slide 7: Portfolio Investments
Portfolio Investments For personal use only
Slide 8: Revaluations
Charter Hall Retail REIT Revaluations Australian portfolio For personal use only 12 months to Jun 2014 Freestanders Neighbourhood Sub-regional Total Number of properties 19 42 16 77 Jun 2014 valuation (A$m) 191.7 961.5 836.0 1,989.2 Prior book value1 (A$m) 184.6 933.4 826.8 1,944.8 Movement in book
Slide 9: Australian Capital Transactions
Charter Hall Retail REIT Australian Capital Transactions Completed transactions For personal use only Acquisitions Price $m Yield Settlement Secret Harbour, WA 33.2 7.8%1 Jul 2013 Southgate Plaza, SA 60.0 7.5% Oct 2013 Rosebud Plaza, Vic. 100.0 7.8% Nov 2013 Coomera City Centre, Qld 59.2 7.4% July 2
Slide 10: Australian Acquisitions – Case study – Coomera City Centre, Qld
Charter Hall Retail REIT Australian Acquisitions Case study – Coomera City Centre, Qld For personal use only • Meets all the REIT’s investment criteria Key metrics Valuation $59.2m • Located in one of South East Queensland’s major growth corridors Year one yield 7.4% • Trade area population forecast
Slide 11: Australian Redevelopments
Charter Hall Retail REIT Australian Redevelopments Current and completed major projects For personal use only Project Value Stabilised ($m) Yield Completion Completed Projects Singleton Square, NSW 62.0 8.3% Aug 13 South Hedland, WA 15.9 14.8% Oct 13 Orange, NSW 5.7 9.1% Apr 14 Total 83.6 9.6% Curre
Slide 12: Australian Redevelopments – Case study – Lansell Square, Vic.
Charter Hall Retail REIT Australian Redevelopments Case study – Lansell Square, Vic. For personal use only • $39 million redevelopment commenced in November 2013 • In line with the REIT’s focus on enhancing its existing portfolio • Complete refurbishment which will include addition of a new 650 sqm
Slide 13: Australian Operational Performance
Australian Operational Performance For personal use only
Slide 14: Australian Portfolio – Summary
Charter Hall Retail REIT Australian Portfolio Summary For personal use only Same Other key metrics Summary by GLA Property NOI Asset Type # (‘000sqm) Occupancy1 Growth • Specialty rent growth of +2.6%: Sub-regional +2.8% on 179 renewals shopping 16 238.2 98.7% 2.4% +2.0% on 53 new leases centres
Slide 15: Australian Portfolio – Anchor tenants
Charter Hall Retail REIT Australian Portfolio Anchor tenants For personal use only • Wesfarmers and Woolworths Top 5 tenants by annual base rent businesses represent 53% of ABR - 41% from Supermarkets and Liquor Wesfarmers subsidiaries, 26.5% Coles - 12% from Discount Department Stores Woolworths Wo
Slide 16: Australian Portfolio – Specialty tenants
Charter Hall Retail REIT Australian Portfolio Specialty tenants For personal use only % of Occupancy Sales Specialty occupancy cost of 9.0% Summary by Category ABR Cost1 Growth1 • Average specialty gross rent $776/sqm Services 8% 12.0% 3.6% • Sales productivity of $8,642/sqm Food catering 8% 12.0% (
Slide 17: Financial Performance
Financial Performance For personal use only
Slide 18: Operating Earnings and Distributions
Charter Hall Retail REIT Operating Earnings and Distributions For personal use only • Operating earnings per unit growth of 3% reflects delivery on the REIT’s strategy: A$m FY14 FY13 – Active management – Same property NOI growth Australian net property income 123.4 108.7 of 2.0% on Australian portf
Slide 19: Balance Sheet
Charter Hall Retail REIT Balance Sheet For personal use only Post balance date Jun 13 Jun 14 initiatives1 • NTA increased by 2.4%, reflecting Total assets 2,034 2,051 1,992 Australian valuation uplift of $58 million during the year Total debt (811) (716) (661) • Balance sheet gearing reduced by 6.6%
Slide 20: Debt Maturity Profile
Charter Hall Retail REIT Debt Maturity Profile For personal use only Debt Maturity Profile at 30 June 20142 • $828 million of debt facilities repaid or refinanced in the period, taking advantage of stronger debt markets FY15 • Australian CMBS maturity in September 2015 presents FY16 opportunity to r
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 Investment Strategy Typical GLA Anchor Tenants Woolworths Neighbourhood < 10,000sqm Coles • Neighbourhood and Woolworths sub-regional supermarket Coles anchored Sub-regional 10,000 to 40,000sqm Kmart Big W • $20 -
Slide 23: REIT Strategy
Charter Hall Retail REIT REIT Strategy For personal use only The pre-eminent owner and manager of Goal Australian neighbourhood and sub-regional supermarket anchored shopping centres Active Enhance Prudent capital management portfolio quality management • Maintaining strong tenant • Value enhancing
Slide 24: FY15 Outlook
Charter Hall Retail REIT FY15 Outlook For personal use only • Barring unforeseen events the REIT’s FY15 guidance for operating earnings is between 29.6 and 30.0 cents per unit • FY15 operating earnings guidance represents approx. 7% growth on FY14 Australian operating earnings of 27.75 cents per uni
Slide 25: Questions
For personal use only Questions
Slide 26: Annexures
For personal use only Annexures
Slide 27: Annexures
Charter Hall Retail REIT Annexures For personal use only 1 Detailed Earnings Slide 27 2 Balance Sheet, NTA & Earnings Reconciliation Slide 28 – 29 3 Australian Debt & Interest Rate Management Slide 30 4 Capital Expenditure & Development Pipeline Slide 31 – 32 5 Portfolio Detail Slide 33 – 34 6 Prope
Slide 28: Annexure – Detailed earnings
Charter Hall Retail REIT Annexure 1 Detailed earnings For personal use only Jun 2014 Jun 2014 Jun 2014 Jun 2013 (All Values In A$m) Statutory Unrealised And Operating Operating Share of profits from investment in JV’s Profit Other Items Earnings Earnings Net property income 15.2 (0.1) 15.1 18.3 Prop
Slide 29: Annexure – Balance sheet
Charter Hall Retail REIT Annexure 2 Balance sheet For personal use only Post Balance Australia Offshore Jun 2014 Date Initiatives1 Total properties 1,777 126 1,903 1,844 Other assets 148 - 148 148 Total debt (601) (115) (716) (661) Other liabilities (77) (3) (80) (76) Net assets 1,247 8 1,255 1,255
Slide 30: Annexure – NTA reconciliation
Charter Hall Retail REIT Annexure 2 For personal use only NTA reconciliation +0.12 (0.06) $3.32 +0.03 $3.40 (0.02) +0.01 NTA at A$ interest rate Equity raise Valuation movement Valuation movement Retained operating NTA at 30 June 2013 swap MtM Australia offshore earnings 30 June 2014 Operating earni
Slide 31: Annexure – Australian debt and interest rate management
Charter Hall Retail REIT Annexure 3 Australian debt and interest rate management For personal use only Debt Maturities & Covenants 30 June 2014 Limit Drawn Rate Maturity Financial Covenants Covenant Actual (All Values CQR Share) (A$m) (A$m) A$CMBS 250.0 250.0 Floating Sep-15 n/a n/a n/a LVR 55.0% 38
Slide 32: Annexure – Capital expenditure
Charter Hall Retail REIT Annexure 4 Capital expenditure For personal use only Total Maintenance and Region (A$m, CQR Share) Maintenance Lease Incentives Incentives Redevelopment Australia FY14 7.8 2.3 10.1 59.4 FY13 6.1 1.8 7.9 60.9 FY12 4.6 2.1 6.7 20.5 New Zealand FY14 - - - - FY13 0.1 - 0.1 - FY1
Slide 33: Annexure – Major redevelopment projects pipeline
Charter Hall Retail REIT Annexure 4 Major redevelopment projects pipeline For personal use only FY14 FY15 FY16 FY17 Mount Hutton, $23.0m Wanneroo (stage 2), $19.3m Secret Harbour, $46.2m South Hedland (stage 2), $22.7m Wanneroo (stage 1), $2.5m Gladstone, $2.1m Mackay, $5.2m Caboolture, $16.8m Lanse
Slide 34: Annexure – Australia – anchor tenant lease expiry
Charter Hall Retail REIT Annexure 5 Australia – anchor tenant lease expiry For personal use only 80% 70% 65.2% 60% 50% 40% 30% 20% 7.8% 8.4% 5.0% 4.3% 5.9% 10% 1.1% 1.0% 1.3% 0% FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23+ Excludes properties under redevelopment 33
Slide 35: Annexure – Australia – specialty tenant lease expiry
Charter Hall Retail REIT Annexure 5 Australia – specialty tenant lease expiry For personal use only 30% 25% 19.8% 20% 16.3% 15.8% 15.8% 13.6% 15% 10% 7.2% 5.5% 5% 2.3% 3.7% 0% FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23+ Excludes properties under redevelopment 34
Slide 36: Annexure – Property valuations
Charter Hall Retail REIT Annexure 6 Property valuations For personal use only State Property Location Asset Type Interest % Book Value ($'m) Cap rate ACT Dickson Woolworths Dickson Freestander 100% 15.7 6.75% Erindale Shopping Centre Wanniassa Neighbourhood 100% 33.5 7.77% Manuka Terrace Manuka Neig
Slide 37: Annexure – Property valuations
Charter Hall Retail REIT Annexure 6 Property valuations For personal use only State Property Location Asset Type Interest % Book Value ($'m) Cap rate Pemulwuy Marketplace Greystanes Neighbourhood 50% 11.7 7.50% Rosehill Woolworths Rosehill Freestander 100% 10.4 6.50% Rutherford Marketplace Rutherfor
Slide 38: Annexure – Property valuations
Charter Hall Retail REIT Annexure 6 Property valuations For personal use only State Property Location Asset Type Interest % Book Value ($'m) Cap rate Sydney Street Markets Mackay Neighbourhood 100% 41.5 7.75% Tablelands Village1 Atherton Neighbourhood 100% 27.2 n/a QLD Total 398.8 SA Renmark Plaza R
Slide 39: Annexure – Property valuations
Charter Hall Retail REIT Annexure 6 Property valuations For personal use only State Property Location Asset Type Interest % Book Value ($'m) Cap rate Esperance Boulevard Esperance Neighbourhood 100% 27.1 8.00% Kalgoorlie Central Kalgoorlie Neighbourhood 100% 32.0 7.75% Maylands Coles Maylands Freest
Slide 40: Annexure – 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 41: 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 Kylie Ramsden Head of Listed Investor Relations +61 2 8651 9204
Slide 42: 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 43: For personal use only
For personal use only
Charter Hall Retail REIT — FY2014 Earnings Presentation on 6ix