Charter Hall Group · ASX:CHC
Charter Hall — FY2006 Earnings Presentation
33 slides from Charter Hall's earnings presentation, Aug 24, 2006
Slide 1: Charter Hall Group Full Year Results FY 2006
CHARTER HALL GROUP FULL YEAR RESULTS FY 2006 24 AUGUST 2006 CHARTER HALL GROUP FULL YEAR RESULTS 2006 1
Slide 2: Contents
CONTENTS 9 YEAR IN REVIEW 9 PROPERTY TRUST UPDATE 9 FUNDS UPDATE 9 FINANCIALS CHARTER HALL GROUP FULL YEAR RESULTS 2006 2
Slide 3: Year in Review
YEAR IN REVIEW 9 Outperformed: FY 06 DPS 7.10c vs 6.56c forecast at IPO (up 8.2%) 9 3 funds launched successfully 9 $787m of equity & equity commitments raised 9 10 investment assets acquired 9 4 development projects secured 9 3 development projects crystallised profits 9 35+ leases comprising over
Slide 4: Year in Review: Key Events Since IPO
YEAR IN REVIEW : KEY EVENTS SINCE IPO FUNDS LAUNCHED / DATE EQUITY RAISED ACQUISITIONS PROJECTS: NEW & COMPLETED MAJOR LEASING DEALS Core Plus Office Fund Core Plus Office Fund CHOF 4 CHPT $36.5m Hatch office asset acquired at Perth 420 George St, Brisbane on-sold for Nunawading: JB HiFi, Howard's S
Slide 5: Year in Review: Key Events Since IPO (Continued)
YEAR IN REVIEW : KEY EVENTS SINCE IPO (Continued) FUNDS LAUNCHED / DATE EQUITY RAISED ACQUISITIONS PROJECTS: NEW & COMPLETED MAJOR LEASING DEALS Diversified Property Fund CHOF 4 CHPT FEB $14.7m Emirates House office asset Northbank Plaza, Brisbane CBD. Office ANZ renews 1,130sqm lease at 2006 acquir
Slide 6: Year in Review: Financial Performance
YEAR IN REVIEW : FINANCIAL PERFORMANCE FY 06 Result Forecast at IPO % Movement DPS 7.10c 6.56c +8.2% EPS 6.47c NPAT $17.42m $16.76m Market cap $543m $270m (As at 22 Aug) (IPO Pro Forma) Gearing 14% 26% (As at 3 July) (IPO Pro Forma) CHARTER HALL GROUP FULL YEAR RESULTS 2006 6
Slide 7: Year in Review: Security Price 10 Jun 05 – 30 Jun 06
YEAR IN REVIEW : SECURITY PRICE 10 JUN 05 – 30 JUN 06 Core Plus Office Fund 1st Close 10 Jun 05 $1.20 Northbank Plaza Project secured $0.75 Listing Price (1st instalment) $1.15 Core Plus Office Fund launched AMEX lease signed at Atrium $1.10 Willis lease signed at Bourke Street $1.05 30 Jun 06 Diver
Slide 8: Year in Review: Security Price 15 Jun 06 – 22 Aug 06
YEAR IN REVIEW : SECURITY PRICE 15 JUN 06 – 22 AUG 06 15 Jun 06 $1.55 Charter Hall $1.27 Entitlement Offer Price Group $1.50 22 Aug 06 $1.52 ASX LPT 300 Closing Price $1.45 $1.40 Price Growth since 19.6% Entitlement Offer $1.35 22 Aug 06 $1.30 $543m 03 Jul 06 13 Jul 06 23 Jul 06 02 A ug 06 12 A ug 0
Slide 9: Year in Review: Equity Raising
YEAR IN REVIEW : EQUITY RAISING 9 The Group has created new products for wholesale and retail markets 9 Having raised both on and off balance sheet equity since IPO, the Group has accumulated significant acquisition capacity % Used or EQUITY RAISING Amount Raised Allocated 9 CORE PLUS OFFICE FUND (C
Slide 10: Year in Review: Product Spectrum
YEAR IN REVIEW : PRODUCT SPECTRUM 9 The Group now offers products covering entire risk/return spectrum targeting all investor market segments Return 18%+ OPPORTUNISTIC 15-17% ENHANCED 12-14% CORE PLUS 9-11% CORE Risk Low High CHOF 4 FUNDS DPF, CHPT, CHIF 1-6 CPOF PDP 2,3 (JV with AMP) CRITERIA Passi
Slide 11: Year in Review: Assets Under Management
YEAR IN REVIEW : ASSETS UNDER MANAGEMENT 9 $1.35 Billion Current AUM ($2.1 Billion once CPOF fully invested) 2500 $608m 2000 1500 $741m $627m 1000 $718m $568m $755m 500 $333m $395m $81m $177m $273m $288m $28m $28m $61m $88m $97m $97m $14m 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 CPOF Remaining
Slide 12: Property Trust (CHPT) Update
PROPERTY TRUST (CHPT) UPDATE CHARTER HALL GROUP FULL YEAR RESULTS 2006 12
Slide 13: Property Trust (CHPT)
PROPERTY TRUST (CHPT) 9 $327m CHPT offers attractive asset diversification Bourke Industrial Industrial Kent CPOF DPF 19.1% 12.4% Retail / Bulky 9.7% 7.4% 4.5% 1.2% Goods Retail 42.8% Tullamarine 7.4% Chullora 25 Nepean 4.4% Retail / Bulky Commercial Hwy Goods Retail 28.7% 6.8% Menai 58.9% 11.9% Men
Slide 14: Property Trust (CHPT): Lease Expiry Profile
PROPERTY TRUST (CHPT) LEASE EXPIRY PROFILE BY NET INCOME 50% 40% 30% 20% 10% 0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Lease Expiry Profile Wilson Parking Nunawading & Mentone represent uncommitted tenancies DPF 5.4 Harvey Norman 6.2% CPOF 12.9 Tullamarine 7.
Slide 15: Property Trust (CHPT): Nunawading and Mentone
PROPERTY TRUST (CHPT) HOME HQ, NUNAWADING VIC 27-29 / 61 NEPEAN HWY, MENTONE 9 Completion date 20 October 2006 9 Applications for rezoning and development now fully approved 9 Leasing progressing well – 72% leases signed or under HoA and 28% in advanced negotiations 9 Development likely to start in
Slide 16: Property Trust (CHPT): Bourke Street and Kent Street
PROPERTY TRUST (CHPT) 570 BOURKE STREET, MELBOURNE 400 KENT STREET, SYDNEY 9 Willis Australia signed lease over levels 3, 4 & 5, 9 Fitout works by Central QLD University Victorian Government signed lease over level 20 completed and ANZ renewed lease over 1,130sqm 9 Occupancy level 100% CHARTER HALL
Slide 17: Property Trust (CHPT): Mentone and Tullamarine
PROPERTY TRUST (CHPT) 25 NEPEAN HWY, MENTONE VIC MELBOURNE AIRPORT BUSINESS PARK TULLAMARINE VIC 9 Acquired using the Entitlement Offer proceeds 9 Acquired using the Entitlement Offer proceeds 9 A-Mart All Sports 8 year lease signed 9 Progress payments on schedule 9 Anticipated completion date Dec 2
Slide 18: Funds Update
FUNDS UPDATE CHARTER HALL GROUP FULL YEAR RESULTS 2006 18
Slide 19: Core Plus Office Fund (CPOF)
CORE PLUS OFFICE FUND (CPOF) 9 $500m of equity commitments raised from wholesale investors 9 Open ended fund investing in passive (70%) and enhanced (30%) office assets throughout Australia 9 27.1% of capital already allocated in 3 assets in Sydney and Perth 9 CHG earns annual fund management fee of
Slide 20: Core Plus Office Fund (CPOF) Assets
CORE PLUS OFFICE FUND (CPOF) Atrium, Pyrmont 9 $137m, 20,000sqm A-grade office building 9 Pre-leased to AMEX (12yrs) and Coles Supermarket (20yrs) 333 George St, Sydney 9 $69m, 9,882sqm B-grade office building, substantially refurbished in 2003/2004. Average gross passing rent of $400/sqm 9 Prime lo
Slide 21: Diversified Property Fund (DPF)
DIVERSIFIED PROPERTY FUND (DPF) 9 Launched in September 2005 9 Current AUM $48m comprising 5 assets in 4 states, NSW, QLD, WA and VIC 9 Targeting asset size in $5m to $30m price bracket 9 Open-ended fund with strong potential for growth 9 Listed on Macquarie and BT Wrap platforms 9 CHG receives acqu
Slide 22: Diversified Property Fund (DPF) Diversification
DIVERSIFIED PROPERTY FUND (DPF) 9 Good asset diversification and quality tenant composition St Georges Tce Perth CBD WA 30.5% Other Mulgrave 30.5% QLD 8.7% Melb Metro 9.8% 11.9% National, Internat'l & Retail St Pauls Tce Chain Gov't Brisbane Fringe Kent St 64.9% 9.8% Related Sydney CBD NSW 26.4% 24.
Slide 23: CHOF 4
CHOF 4 9 Launched in July 2005 after being significantly oversubscribed 9 Raised $165m of equity - largest opportunity fund in Australia at time of close 9 Capacity for over $500m of project end value (up to $1 Billion with JV) 9 3 projects underway while 420 George St in Brisbane has been on-sold f
Slide 24: CHOF 4 Project 1: Northbank Plaza, Brisbane
CHOF 4 PROJECT 1: NORTHBANK PLAZA, BRISBANE QLD 9 Refurbishment of existing 26,000sqm office building 9 50/50 JV with a local development group 9 Completion Value $134m 9 Completion Date late 2007 CHARTER HALL GROUP FULL YEAR RESULTS 2006 24
Slide 25: CHOF 4 Project 2: George Street, Brisbane
CHOF 4 PROJECT 2: 275 GEORGE STREET, BRISBANE QLD 9 DA lodged for 41,600sqm A-grade office tower with retail and parking components 9 50/50 JV with a local development group 9 The building targets 4.5 star Australian Building Greenhouse Rating 9 Completion Value $320m CHARTER HALL GROUP FULL YEAR RE
Slide 26: CHOF 4 Project 3: Mounts Bay Road, Perth
CHOF 4 PROJECT 3: MOUNTS BAY ROAD, PERTH WA 9 DA lodged for 21,000sqm A-grade CBD office building 9 50/50 JV with local development group Cape Bouvard 9 CHOF 4 will oversee development process while Cape Bouvard will be responsible for project management 9 Completion Value $160m CHARTER HALL GROUP F
Slide 27: PDP Funds
PDP FUNDS SYDNEY WHARF, PYRMONT BAY (PDP 3) 9 104 luxury harbour apartments and 54 marina berths, currently 65% pre-sold 9 Construction underway and due for completion in late 2008 9 Completion Value $300m, Completion Date mid 2008 151 PIRIE STREET, ADELAIDE (PDP 3) 9 A-grade, 4.5 star ABGR office b
Slide 28: PDP Funds: Performance Fees
PDP FUNDS 9 Performance fees forecast in Prospectus/PDS for FY06 have been achieved (75% of Atrium fee recognised in Jan 06, 25% in FY07) 9 PDP 2: Atrium Pyrmont sold to CPOF for $139.2m 9 PDP 2: Bourke Street Alexandria sold to Daimler-Chrysler 9 Performance Fee outlook for FY 07 is robust * 50/50
Slide 29: Full Year Financials
FULL YEAR FINANCIALS CHARTER HALL GROUP FULL YEAR RESULTS 2006 29
Slide 30: Financials: Income Statement
FINANCIALS INCOME STATEMENT Notes (000s) 1. Comprises interest on cash balances, interest on 12 months to 30 Jun 06 bridging loan to DPF and interest on loans to executives for securities (excludes interest on LTI Net Rental Income 11,995 staff plan loans in accordance with AASB 2). Income guarantee
Slide 31: Financials: Consolidated Balance Sheet
FINANCIALS Consolidated Balance Sheet Notes (000s) 1. Includes cash of $168m due to receipt of cash As at 30 Jun 06 relating to 2nd call, equity raising and CPOF raising. Current assets 1 204,019 Non current assets 301,039 2. Includes $58m CPOF cash raised - units allotted Total assets 505,058 to CP
Slide 32: Wrap Up
WRAP UP 9 Business model producing enhanced return on equity 9 Access to different sources of equity driving growth 9 Performance across all funds increasing traction for equity raising 9 Positive outlook for new product creation CHARTER HALL GROUP FULL YEAR RESULTS 2006 32
Slide 33: Charter Hall Group Structure
CHARTER HALL GROUP STRUCTURE Board of Directors CHARTER HALL CHARTER HALL LIMITED Stapled & Managed PROPERTY TRUST via Responsible Entity Charter Hall Funds Management Limited Joint CEO Joint CEO David Harrison David Southon Property Property FUNDS PROPERTY Investment Management MANAGEMENT DEVELOPME