This article is from the Australian Property Journal archive
DESPITE challenging market conditions, Charter Hall Group (ASX: CHC) managed to broadly offset the impacts of net valuation declines in the FY23 period.
CHC posted a statutory profit after tax of $196.1 million for the FY23 period, down 78.5% from $911.1 million in FY22.
Charter Hall’s operating earnings for the period of $441.2 million after tax down 18.7% from $542.8 million in FY22, reflecting operating earnings per security after tax of 93.3 cents down 19.3% from 115.0 cents.
Distributions were posted at 42.5 cps up 6.0% from 40.1 cents in FY22, with EBITDA at %596.8 million down 18.3% from $730.5 million in FY22. And NTA per stapled security at $6.28 up from $6.26 in FY22.
“Despite challenging conditions, FY23 maintained Group FUM despite downward valuations driven by rising interest rates,” said David Harrison, group CEO and managing director of Charter Hall.
“Property FUM grew $6.2 billion to $71.9 billion and our operating earnings ex-transaction and performance fees grew strongly, reflecting growth in FUM, the benefits of scale and our diligent focus on costs.
Over the period, Charter Hall Long WALE REIT (ASX: CLW) posted a statutory loss of $189.0 million following net valuation declines of $363 million across its portfolio, while Charter Hall Social Infrastructure REIT (ASX: CQE) posted a $58.7 million statutory profit for the FY23 period.
“Charter Hall Group’s (CHC) results for the fiscal year ended June 2023 are in line with our expectations. The group reported strong operating and financial metrics despite the challenging environment for commercial real estate. CHC benefits from a well-diversified portfolio of quality assets,” noted Saranga Ranasinghe, vice president at Moody’s Investors Service.
Over FY23, Charter Hall’s property investment portfolio’s divestments and deployment offset the group’s valuation declines for a net value increase of $33 million to $3.0 billion.
Portfolio occupancy was at 97.6%, with a WALE of 7.4-years and the weighted average rent review at 3.6% per annum.
“We delivered $3.1 billion of new developments for our funds, successfully completing 4 new office buildings and 17 logistics facilities,” added Harrison.
“We remain well-placed to deploy capital into opportunities as they emerge, with $6 billion in available liquidity, which has risen to $7 billion post balance date with the $1.2 billion CPIF Asian Term Loan facility closing in August, whilst the committed and uncommitted $13.9 billion development pipeline provides further organic growth potential.”
Over the period, CHC completed $7.4 billion in new and refinanced debt facilities across its platform, with an additional $1.2 billion post-balance date.
CHC’s platform facility limits exceed $30 billion, with the group’s balance sheet holding $401 million of cash at the close of the year.
CHC has the lowest balance sheet gearing in the AREIT sector at 2.2%, with $600 million of liquidity and the platform’s $7 billion of liquidity to fully fund its development pipeline.
“CHC’s annuity-like earnings, which includes funds management revenue, increased around 16%, supported by property funds under management rising to around $72 billion from around $65.6 billion the year before,” added Ranasinghe.
“Despite net equity inflows being lower than previous years’, CHC attracted around $1.5 billion to its funds through diverse sources of equity, reflecting demand that still continues for good quality, well-positioned commercial real estate.”
Charter Hall provided a FY24 earnings guidance for post-tax operating earnings per security of approximately 75 cents per security and a FY24 distribution per security guidance of 6% growth over FY23.
