This article is from the Australian Property Journal archive
MAJOR property player Charter Hall has upgraded its full-year guidance after a strong first half performance that saw its managed funds boosted to $28.4 billion.
It posted an interim profit increase of 10.7% on the prior corresponding period to $133.5 million, and 13% uplifts in both operating earnings, to $107.5 million, and in post-tax operating earnings per security to 23.1 cps.
Initial full-year guidance was for post-tax operating earnings per security growth of 8% to 10% on FY2018, underpinned by its acquisition of Folkestone growing its fund under management by $1.6 billion, but that has now been taken up to between 14% to 17%.
The guidance includes a $40 million accrual – $20 million in each half – for the CHOT performance fee, and the distribution payout ratio is expected to be between 70% and 95% of operating earnings per security post-tax.
Managed funds grew by $5.2 billion to $28.4 billion, driven by $2.3 billion of net transactions, totalling $3.8 billion gross, as well as the $1.6 billion acquisition of Folkestone, positive revaluations of $700 million and capex spend on developments of $500 million.
Gross equity inflows totalled $1.2 billion, with $743 million raised in wholesale funds and partnerships, $305 million raised in direct funds and $172 million in listed funds. Some $3.1 billion was put towards strategic asset acquisitions, and a further $2.6 billion additional funding capacity available across the platform.
There were 334 separate leasing deals struck across nearly 400,000 sqm of space, including seven leases to major retailers covering 29,000 sqm and a new 7,600 sqm, long term 12-year lease to the Australian Financial Complaints Authority at Wesley Place in Melbourne.
“With $2.6 billion of investment growth capacity, we are well positioned to continue growing via our development pipeline as well as taking advantage of strategic opportunities as they arise,” Charter Hall’s managing director and group chief executive officer, David Harrison said.
Development completions over the past three years have added $2.6 billion of FUM, and Charter Hall has a total pipeline of identified projects with an on-completion value of $5.3 billion.
New and refinanced debt facilities totalled $4.1 billion during the period and there are no material maturities in FY20. Balance sheet gearing is at 5.5%, weighted average debt maturity 7.1 years and cash on hand $115 million.
Charter Hall’s property investment portfolio grew by 6.7% to $1.8 billion in the half and generated a 12.0% return, while it strengthened its exposure to the social infrastructure sector via the Charter Hall Education Trust following the Folkestone acquisition.
Tenant retention was 78%, total portfolio occupancy was at 97.8% and weighted average lease expiry improved to 7.5 years.
The property investment portfolio’s total property return over the five years to the end of 2018 was 14.2% per annum, ahead of the MSCI/IPD Unlisted Wholesale Property Fund Index of 11.1% over the same period.
Charter Hall’s property funds management portfolio grew to 820 properties with 3,157 tenancies, a WALE of 8.0 years and delivered more than $1.8 billion dollars of gross rental income.
Australian Property Journal
