Charter Hall Retail Reit · ASX:CQR
Charter Hall Retail Reit — H1 2024 Earnings Presentation
36 slides from Charter Hall Retail Reit's earnings presentation, Feb 16, 2024
Slide 1: CQR 2024 Half Year Results
CQR Charter Hall Social Infrastructure REIT Charter Hall Retail REIT 2024 Half Year Results 2023 Full Year Results
Slide 2: Agenda
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. Agenda 1. Highlights and Strategy 2. Financial Performance 3. Opera
Slide 3: Highlights and Strategy
1 bp Newstead, Qld Highlights and Strategy Charter Hall Retail REIT Charter Hall Retail REIT 2024 Half Year Results 2024 Half Year Results
Slide 4: Portfolio Highlights
Highlights and Strategy Portfolio Highlights Key metrics 1H FY23 1H FY24 Movement Same property NPI growth Total MAT growth1 Operating earnings $83.4m $78.6m (5.8%) 3.7% 4.1% Operating earnings per unit 14.35 cents 13.52 cents (5.8%) from 2.9% for 1H FY23 Supermarket MAT growth 4.6% Distributions
Slide 5: CQR Convenience Strategy
Highlights and Strategy CQR Convenience Strategy Providing a resilient and The leading owner growing income stream for our investors from of convenience retail property convenience retail property KEY DRIVERS Enhance Active asset Prudent capital portfolio quality management management − Increasing e
Slide 6: Delivering on Convenience Strategy
Highlights and Strategy Delivering on Convenience Strategy Active portfolio curation driving major tenant income growth FY18 2023 Long Term Stable 4% of major tenant rent reviews 38% of major tenant rent reviews Forecast CPI based CPI based Rental Income Rental Income % of income % of income Rental
Slide 7: Delivering on Strategy
Highlights and Strategy Delivering on Strategy Strategic portfolio curation and asset recycling into accretive higher quality Divestments - $290m Acquisitions2 - $33m assets - Unsolicited off-market offers for four divestment assets totalling $290 in line with book values1 - Proceeds used to repay d
Slide 8: Eastgate Bondi Junction
Highlights and Strategy Eastgate Bondi Junction Asset recycling into high-quality metro assets with strong investment returns – CQR has acquired a 20% interest in Eastgate, Bondi Junction through the RP6 joint venture – This complements CQR's other Eastern Suburbs Sydney metro assets of Pacific Squa
Slide 9: ESG Leadership
Highlights and strategy ESG Leadership Achievements in HY24 Focus areas in FY24+ Net Zero Carbon by 20251 Investing in clean energy 5.0 Star NABERS Energy portfolio Align with Charter Hall Group on Environment rating for Retail an uplift of Scope 3 boundary and target CQR is now supplied electricity
Slide 10: Financial Performance
Charter Hall Retail REIT Charter Hall Retail REIT 2024 Half Year Results 2024 Half Year Results 2 Financial Performance Rye Hotel, Mornington Peninsula Vic
Slide 11: Earnings and Distributions
Financial Performance Earnings and Distributions Look through basis - Total net property income growth of 3.6% $m 1H FY23 1H FY24 % change - including the impact of divesting Brickworks, SA and Allenstown, Qld and acquiring Gull Net property income from convenience shopping centre retail 95.0 95.7 0
Slide 12: Balance Sheet
Financial Performance Balance Sheet - NTA per unit decreased by $0.19 or 4.0% to Look through basis $m Jun 23 Dec 23 $4.54 driven by property portfolio valuation changes and derivative movements Convenience shopping centre retail investment properties1 3,217 3,140 - Pro-forma balance sheet gearing h
Slide 13: Property Valuations
Financial Performance Property Valuations Convenience Convenience $m shopping centre net lease Total portfolio - Income growth driving portfolio valuation Retail3 retail resilience with a movement of -1.1% or -$45m June 2023 portfolio value 3,217 1,067 4,284 - Convenience shopping centre retail valu
Slide 14: Capital Management
Financial Performance Capital Management Diversified and well balanced, long-term debt maturity profile1 - Available investment capacity of $518m1 70 - Diversified funding sources with no debt 299 maturing until March 2026 140 - Financing activity added $160m and extended 81 37 34 $325m of debt capa
Slide 15: Operational Performance
3 Campbellfield Charter Hall Retail REIT Charter Hall Retail REIT 2024 Half Year Results 2024 Half Year Results Operational Performance Plaza, Campbellfield Vic Charter Hall Retail REIT 2024 Half Year Results
Slide 16: Portfolio Summary
Operational Performance Portfolio Summary – Convenience shopping centre retail occupancy improved from 98.6% to 98.7% Portfolio snapshot Jun 23 Dec 23 – 4.1% total MAT growth1,2 Number of convenience shopping centre retail assets 49 49 Number of convenience net lease retail assets 597 595 – Portfoli
Slide 17: Portfolio Tenant Customer Composition
Operational Performance Top 10 tenant customer groups1 Portfolio Tenant Customer Composition 14.4% - Major tenants Woolworths, Coles, bp, Wesfarmers2, Ampol, Endeavour, Aldi and Gull 12.8% represent 57% of portfolio income - Largest mini-major and specialty tenant 12.7% represent 1.6% and 1.0% of po
Slide 18: Convenience Net Lease Portfolio
Operational Performance Convenience Net Lease Portfolio Portfolios Value Number of Cap rate WALE Rent $’m Assets (years) review bp Australia 537 220 4.8% 16.0 CPI – Convenience net lease retail represents 26% of bp New Zealand 171 70 5.0% 17.0 CPI (0.5%-4%) total portfolio by value and 21% of total
Slide 19: Supermarket Anchors
Operational Performance Supermarket Anchors – Supermarkets continued to demonstrate resilience with 4.6% MAT growth1 Supermarket performance Jun 23 Dec 23 – Supermarkets in turnover have experienced stronger 4.9% MAT growth1 MAT growth1 4.3% 4.6% – Highest percentage of supermarkets in turnover at 7
Slide 20: Specialty Tenants
Operational Performance Specialty Tenants Specialty performance Jun 23 Dec 23 – 172 specialty leases completed in the period MAT growth1 9.0% 3.6% Sales productivity (per sqm) $10,489 $10,710 – Leasing spreads over the period were +1.2% Average gross rent (per sqm) $1,191 $1,215 – 70 new leases (+0.
Slide 21: Outlook and Guidance
Charter Charter Hall 2024 2024 Half Hall Retail Retail REIT Half Year REIT Charter Hall Retail REIT Year Results Results 2024 Half Year Results 4 Outlook and Guidance Bateau Bay Square, Bateau Bay NSW
Slide 22: Outlook and Guidance
Outlook and Guidance Outlook and Guidance – Strategy remains consistent and focused on non-discretionary convenience retailers, providing income growth and resilience – Portfolio curation and active asset management with an increased focus on convenience net lease retail will continue to improve por
Slide 23: Annexures
Charter Hall Retail REIT Charter Hall Retail REIT 2024 Half Year Results 2024 Half Year Results 5 Annexures Rutherford Marketplace, Rutherford NSW
Slide 24: Annexures
Annexures Annexures 1 6 Reconciliation of statutory profit to operating earnings Portfolio MAT by state and category 2 7 Investment in property joint ventures Convenience shopping centre retail portfolio historical performance 3 8 Debt maturities and covenants Glossary 4 Lease expiry profile 5 Prope
Slide 25: Reconciliation of statutory earnings to operating earnings
Annexures Annexure 1 Reconciliation of statutory earnings to operating earnings $m 1H FY23 1H FY24 Statutory earnings 124.8 (42.1) Investment property revaluation1 (67.1) 82.8 Net loss on derivative financial instruments 15.9 28.5 Other (including straight-lining of rental income and amortisation of
Slide 26: Investment in property joint ventures 1H FY24
Annexures Annexure 2 Investment in property joint ventures – operating earnings and balance sheet breakdown 1H FY24 Convenience Convenience bp Ampol Gull LWIP2 $m CQR RP1 RP2 RP6 Other shopping centre CDC net lease Total portfolios portfolios portfolio portfolio retail retail Ownership interest 100%
Slide 27: Investment in property joint ventures 1H FY23
Annexures Annexure 2 continued Investment in property joint ventures – operating earnings and balance sheet breakdown 1H FY23 Convenience Convenience bp Ampol Gull LWIP2 $m CQR RP1 RP2 RP6 Other shopping centre CDC4 net lease Total portfolios portfolios1 portfolio2 portfolio3 retail retail Ownership
Slide 28: Debt maturities and covenants
Annexures Annexure 3 Debt maturities and covenants as at 31 December 2023 ICR LVR Limit Drawn ICR LVR Debt facility (ownership interest) Maturity covenant covenant ($m) ($m) covenant covenant actual actual CQR bank debt facilities 100 Mar-26 200 Jul-26 75 Nov-26 95 Nov-26 75 Jul-27 50 Jul-28 130 Jul
Slide 29: Lease expiry profile
Annexures Annexure 4 Lease expiry profile as at 31 December 2023 Major tenant expiry profile (by income) 60% 54.0% 10.1 years 40% Major tenant WALE 20% 7.1 years 5.6% 9.8% 5.4% 7.1% 7.1% 7.6% 1.8% 1.6% Portfolio WALE 0.0% 0% FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32 FY33+ 3.5 years Specialty and
Slide 30: Property valuations
Annexures Annexure 5 Property valuations as at 31 December 2023 State Property Location Ownership interest (%) Book Value ($m) Cap Rate NSW Bass Hill Plaza Bass Hill 20.0% 28.0 5.50% Bateau Bay Square Bateau Bay 49.9% 129.7 5.88% Carnes Hill Marketplace Horningsea Park 50.0% 86.3 5.50% Cootamundra W
Slide 31: Property valuations continued
Annexures Annexure 5 continued Property valuations as at 31 December 2023 continued State Property Location Ownership interest (%) Book Value ($m) Cap Rate Qld Arana Hills Plaza Arana Hills 100.0% 85.0 5.88% Atherton Square Atherton 100.0% 44.5 6.25% Bay Plaza Hervey Bay 100.0% 33.4 6.25% Bribie Isl
Slide 32: Property valuations continued
Annexures Annexure 5 continued Property valuations as at 31 December 2023 continued State Property Location Ownership interest (%) Book Value ($m) Cap Rate ACT Manuka Terrace Manuka 100.0% 57.0 6.25% ACT Total 57.0 Held for sale1 290.0 Convenience shopping centre retail portfolio 3,140.0 6.07% bp Au
Slide 33: Portfolio MAT by state and category
Annexures Annexure 6 Portfolio MAT by state and category as at 31 December 2023 % of Specialty sales by state % of specialty sales MAT growth1 MAT Sales by category portfolio growth1 sales New South Wales & ACT 57% 2.6% Supermarket 64.5% 4.6% Queensland 15% 3.1% Western Australia 14% 5.4% DDS 10.9%
Slide 34: Convenience shopping centre retail portfolio historical performance
Annexures Annexure 7 Convenience shopping centre retail portfolio historical performance Dec 18 Jun 19 Dec 19 Jun 20 Dec 20 Jun 21 Dec 21 Jun 22 Dec 22 Jun 23 Dec 23 Number of properties 58 58 55 51 50 50 51 51 51 49 49 Occupancy 98.1% 98.1% 98.1% 97.3% 97.8% 98.3% 98.4% 98.5% 98.6% 98.6% 98.7% 5 5
Slide 35: Glossary
Annexures Annexure 8 Glossary 1H FY23 JV Six-months from 1 July 2022 to 31 December 2022 Joint venture 1H FY24 MAT Six-months from 1 July 2023 to 31 December 2023 Moving annual turnover calculated as a sum of rolling 12-month sales WALE NPI Weighted Average Lease Expiry calculated based on income Ne
Slide 36: 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/cqr IMPORTANT NOTICE & DISCLAIMER This presentation ("Presentation") has been prepared by and is the s
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