CHARTER HALL GROUP — AGM Information 2019

Nov 12, 2019

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Charter Hall Group 2019 Annual General Meeting 2 Chifley Square, Sydney NSW
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Charter Hall Group 2019 Annual General Meeting

13 November 2019

1 Chair’s Address: David Clarke

2 Managing Director’s Address: David Harrison

3 Formal Businss

Agenda

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Charter HalCharter Ha l Group 2019 Annual General Meeting l Group 2019 Annual General Meeting

Chair’s Address

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1, 10 & 12 Shelley Street, Sydney NSW 3
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Charter Hall Group 2019 Annual General Meeting

Chair’s Address

Board of Directors

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David Clarke Chair

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David Ross Anne Brennan Non-Executive Director Non-Executive Director

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Karen Moses Non-Executive Director

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Philip Garling Non-Executive Director

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David Harrison Managing Director & Group CEO

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Greg Paramor Non-Executive Director

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Charter Hall Group 2019 Annual General Meeting

Chair’s Address

Sustained growth Strong growth in earnings underpinning distribution growth

Operating earnings per security growth

Distributions per security growth

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Pre-tax OEPS
Post-tax OEPS 56.3cps
43.5cps
47.4cps
40.5cps
30.4cps 37.7cps
35.9cps
27.5cps
25.3cps
FY14 FY15 FY16 FY17 FY18 FY19
Post tax growth
8.5% 10.5% 18.1% 5.0% 25.5%
Pre tax growth
8.5% 10.5% 33.2% 7.4% 29.4%
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DPS (grossed up)
DPS 1 40.0cps
36.9cps
30.0cps 33.7cps
31.8cps
26.9cps
24.2cps
22.3cps
FY14 FY15 FY16 FY17 FY18 FY19
8.5% 11.2% 11.5% 6.0% 6.0%
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1. Grossed up distribution includes franking credits of 6.3cps paid to securityholders in FY19 (5.1cps in FY18)

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Charter Hall Group 2019 Annual General Meeting

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Managing Director’s Address

Environment, Social & Governance

Environment

Social

Leading green initiatives

Create strong and engaged communities

• Australia’s largest Green Star footprint

• Our People - 378 employee volunteer days

• Our Places - provided over $1.7m or 46,054sqm in space for use by community organisations, health and wellbeing activities

• Energy improvements across the Office portfolio with weighted average ratings increasing from 4.71 Star NABERS Energy to 4.77 NABERS Energy

• Through our Partnerships we invested $775,000 in community programs and services and a further $196,000 for Rural Aid to support drought affected communities

• Onsite renewable energy, in partnership with our tenant customers resulting in 5.2MW of solar PV across the portfolio, generating 7,598MWh of electricity p.a. (507 homes)

• 87% employee engagement and high levels of engagement with our tenant and investor customers

• Stage 1 Retail PPA across 14 shopping centres creating 11,316 kW of solar PV, generating 16,950 MWh of electricity p.a. (1,130 homes)

• Building on our WELL footprint in our offices, existing buildings and new developments

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Governance

Embed a high standard of ethics into our actions

• Developed and launched our new purpose and values

• Became a Signatory to the UN Global Compact

• Developed an understanding of our supply chain and human rights and modern slavery risks

• Ongoing management of our information security practices in alignment with the ISO 27001 framework and regulatory requirements.

• Climate Change risk assessments and adaptation plans in development across all portfolios.

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Charter Hall Group 2019 Annual General Meeting

Managing Director’s Address

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130 Lonsdale Street, Melbourne VIC 7
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Charter Hall Group 2019 Annual General Meeting

Managing Director’s Address

Group funds management portfolio

83% east coast weighting

	Portfolio value ($bn)	Lettable area (m sqm)	No. of Properties	No. of Tenancies	Net income2 ($m)	WALE2 (years)	Occupancy2 (%)	WACR (%)
30 September 2019 35.61 7.0 884 3,487 1,840 8.2 97.7 5.48
30 June 2019 30.4 6.6 844 3,419 1,713 8.2 97.9 5.58
30 June 2018 23.2 5.4 330 2,447 1,634 7.7 98.1 5.74

Diversification by equity source

Asset type diversification

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Other
Social
Infrastructure$0.2bn Shopping Centre
Retail Equity $1.4bn 1% Retail
$5.2bn
4% $4.1bn
15%
Diversfied 11%
Long WALE
$17.4bn
17%
Wholesale
Equity
Listed Fund
$23.4bn
$7.0bn $35.6bn 65% $35.6bn
20%
Office
$17.1bn
48%
Industrial
$6.7bn
19%
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WALE by sector

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12.0
10.1
9.6
6.4
6.0
Shopping Office Social Industrial Diversfied
Centre Retail Infrastructure Long WALE
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1. Includes acquisition of The Glasshouse, Macquarie Park and Bunnings Palmerston, Darwin as announced by CLW on November 4th 2. June 2018 reported on a Gross Income basis

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Charter Hall Group 2019 Annual General Meeting

Managing Director’s Address

Funds under management growth

5 year FUM growth to Jun-19 of 21.5% per annum

• FUM growth of 31.1% in FY19, to $30.4bn

• Additional FUM of $5.2bn (17.2%) since Jun-19, to $35.6bn

Funds under management movement ($bn)

Funds under management by equity source ($bn)

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Wholesale Listed Retail $35.6bn
$5.2bn
$30.4bn
$35.6bn
$5.0bn $7.0bn
$23.2bn $6.3bn
$1.0bn $30.4bn $2.9bn $23.4bn
$1.2bn $19.8bn
$1.6bn $17.5bn $2.8bn $4.4bn
$4.2bn ($0.8bn) $19.1bn
$2.5bn $4.1bn
$13.6bn
$15.9bn
$11.5bn $2.5bn
$1.9bn
$23.2bn $12.9bn
$1.7bn $2.2bn $12.4bn
$2.0bn
$9.5bn
$7.8bn
1 1
Jun-18 Acquisitions Divestments Folkestone Net Capex Jun-19 Sep-19 Jun-14 Jun-15 Jun-16 Jun-17 Jun-18 Jun-19 Sep-19
Acquisition revaluations
18.0% 28.7% 13.7% 17.0% 31.1% 17.2%
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1. Includes acquisition of The Glasshouse, Macquarie Park and Bunnings Palmerston, Darwin as announced by CLW on November 4th

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Charter Hall Group 2019 Annual General Meeting

Managing Director’s Address

Transactional activity and Equity flows

Acquisition activity led by the Office and Industrial sectors

FY19

FY19
($m)	Office	Industrial	Long WALE Retail	Shopping Centre Retail	Social Infrastructure / Other	Total	FY20 YTD
Acquisitions	2,266	899	505	304	177	4,151	4,0911
Divestments	(491)	(107)	(38)	(164)	(5)	(805)	(290)
Net transactions	1,775	792	467	140	172	3,346	3,802
Gross transactions	2,757	1,006	543	468	182	4,956	4,381

37,000 investor customers across Wholesale, Listed & Direct

Diversified equity sources with $3.4bn gross equity raised across 16 funds in the 12 months to 30 June 2019:

• Strong wholesale equity flows with $1.8bn raised in pooled funds CPOF and CPIF in FY19

• 5 successful equity raisings across CLW, CQR and CQE for a total of $692m raised in the Listed market during FY19

• Continued strength in Direct funds with $691m raised in FY19

• $1.5bn equity raised in FY20 year to date

•$1.5bn equity raised in FY20	year to date
($m)	FY16	FY17	FY18	FY19	FY20 YTD
Wholesalepooled funds	606	776	649	1,802	195
Wholesalepartnerships	467	217	322	219	535
Listed funds	76	988	77	692	469
Direct funds	318	355	653	691	294
Gross equity raised	1,467	2,336	1,701	3,404	1,493
Net equityraised	1,099	1,689	1,487	3,287	1,461

• Note: Equity flows includes equity received or returned only and excludes undrawn equity commitments

• Includes acquisition of The Glasshouse, Macquarie Park and Bunnings Palmerston, Darwin as announced by CLW on November 4th

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Charter Hall Group 2019 Annual General Meeting

Formal Business

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242 Exhibition Street, Melbourne VIC 11
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Charter Hall Group 2019 Annual General Meeting

Formal Business

Formal business

• If there are any Securityholders who are eligible to vote who have not received their yellow card, please see a representative from Link Market Services

• Those Securityholders holding a red card are not eligible to vote but can speak at the meeting

• Visitors holding a blue card are not eligible to vote or speak at the meeting

• Copies of the Notice of Meeting, Explanatory Memorandum and Annual Report are available from the registration desk

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Charter Hall Group 2019 Annual General Meeting

Formal Business

Item 1 – Annual report

To receive and consider the Annual Report, consisting of the Financial Report and Director’s Report, and Auditor’s Report for the year ended 30 June 2019.

Note: There is no requirement for Securityholders to approve these reports.

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Charter Hall Group 2019 Annual General Meeting

Formal Business

Item 2 – Election of Directors of CHL

To consider and, if thought fit, pass the following ordinary resolutions of CHL:

2.1 “That Mr David Clarke, a Director of CHL retiring in accordance with the CHL Constitution, is re-elected as a Director of CHL.”

2.2 “That Ms Karen Moses a Director of CHL retiring in accordance with the CHL Constitution, is re-elected as a Director of CHL.”

2.3 “That Mr Greg Paramor, appointed as an additional Director of CHL by the Board, is elected as a Director of CHL.”

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Charter Hall Group 2019 Annual General Meeting

Formal Business

Item 2.1 – Proxies – Re-election of David Clarke

FOR:	94.84%
OPEN:	0.08%
AGAINST:	5.08%

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Charter Hall Group 2019 Annual General Meeting

Formal Business

Item 2.2 – Proxies – Re-election of Karen Moses

FOR:	88.00%
OPEN:	0.08%
AGAINST:	11.92%

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Charter Hall Group 2019 Annual General Meeting

Formal Business

Item 2.3 – Proxies – Appointment of Greg Paramor

FOR:	92.09%
OPEN:	0.08%
AGAINST:	7.83%

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Charter Hall Group 2019 Annual General Meeting

Formal Business

Item 3 – Adoption of remuneration report

To consider and, if thought fit, pass the following ordinary resolution of CHL:

“That the Remuneration Report included in the Annual Report for the year ended 30 June 2019 be adopted.”

Note: The vote on this resolution is advisory only and does not bind Charter Hall Group or the Directors of CHL.

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Charter Hall Group 2019 Annual General Meeting

Formal Business

Item 3 – Proxies – Adoption of remuneration report

FOR:	99.14%
OPEN:	0.08%
AGAINST:	0.79%

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Charter Hall Group 2019 Annual General Meeting

Formal Business

Item 4 – Issue of service rights to Mr David Harrison – Performance rights and options plan (Deferred portion of Short Term Incentive (STI) for FY18)

To consider and, if thought fit, pass the following ordinary resolution of CHL and CHPT:

“That approval is given for all purposes under the Corporations Act and the Listing Rules (in particular, Listing Rule 10.14)for the issue of 67,960 service rights to Mr David Harrison as described in the Explanatory Memorandum.”

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Charter Hall Group 2019 Annual General Meeting

Formal Business

Item 4 – Proxies – Issue of service rights to Mr David Harrison

FOR:	99.77%
OPEN:	0.08%
AGAINST:	2.15%

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Charter Hall Group 2019 Annual General Meeting

Formal Business

Item 5 – Issue of performance rights to Mr David Harrison – Performance rights and options plan (Long Term Incentive (LTI))

To consider and, if thought fit, pass the following ordinary resolution of CHL and CHPT:

“That approval is given for all purposes under the Corporations Act and the Listing Rules (in particular, Listing Rule 10.14)for the issue of 227,441 performance rights to Mr David Harrison as described in the Explanatory Memorandum.”

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Charter Hall Group 2019 Annual General Meeting

Formal Business

Item 5 – Proxies – Issue of performance rights to Mr David Harrison

FOR:	88.83%
OPEN:	0.08%
AGAINST:	11.10%

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Charter Hall Group 2019 Annual General Meeting

Questions

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Chullora Logistics Park, 2 Hume Highway, Chullora NSW 24
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Charter Hall Group 2019 Annual General Meeting

Meeting closed

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Woolworths Dandenong Centre, Dandenong South, VIC

Charter Hall Group 2019 Annual General Meeting

Appendix – Additional information

Contact information

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David Harrison

Managing Director & Group CEO Charter Hall Group

Sean McMahon

Chief Investment Officer Charter Hall Group

Russell Proutt

Chief Financial Officer Charter Hall Group

Philip Cheetham

Head of Listed Investor Relations Charter Hall Group

T: +61 2 8651 9142 E: david.harrison@charterhall.com.au

T: +61 2 8651 9147

E: sean.mcmahon@charterhall.com.au

T: +61 2 8651 9493

E: russell.proutt@charterhall.com.au

T: +61 2 8651 9214

E: philip.cheetham@charterhall.com.au

IMPORTANT NOTICE & DISCLAIMER

This presentation has been prepared by Charter Hall Funds Management Limited ACN 082 991 786)) (together, with its related bodies corporate, the Charter Hall Group).

This presentation has been prepared without reference to your particular investment objectives, financial situation or needs and does not purport to contain all the information that a prospective investor may require in evaluating a possible investment, nor does it contain all the information which would be required in a product disclosure statement prepared in accordance with the requirements of the Corporations Act 2001 (Commonwealth) (Corporations Act). Prospective investors should conduct their own independent review, investigations and analysis of the information contained in or referred to in this presentation and the further due diligence information provided.

Statements in this presentation are made only as of the date of this presentation, unless otherwise stated. Charter Hall Group is not responsible for providing updated information to any prospective investors. Any forecast or other forward looking statement contained in this presentation may involve significant elements of subjective judgement and assumptions as to future events which may or may not be correct. There are usually differences between forecast and actual results because events and actual circumstances frequently do not occur as forecast and these differences may be material.

In making an investment decision, prospective investors must rely on their own examination of the Charter Hall Group, and any other information they consider relevant. All information is provided as indicative only.

This presentation is provided to each prospective investor on the condition that it is strictly confidential and is for the sole use of prospective investors and their advisers. It must not be provided to any other party without the written consent of Charter Hall Group which it may withhold in its absolute discretion.

None of Charter Hall Group, its officers, employees, advisers or securityholders (together, the Beneficiaries) guarantee or make any representation or warranty as to, or take responsibility for, the accuracy, reliability or completeness of the information contained in this presentation. Nothing contained in this presentation nor any other related information made available to prospective investors is, or shall be relied on, as a promise, representation, warranty or guarantee, whether as to the past, present or the future. To the extent permitted by law, the Beneficiaries disclaim all liability that may otherwise arise due to any information contained in this presentation being inaccurate, or due to information being omitted from this document, whether by way of negligence or otherwise. Neither the Beneficiaries nor any other person guarantees the performance of an investment with or managed by Charter Hall Group.

All information contained herein is current as at 30 June 2019 unless otherwise stated. All references to dollars ($) are to Australian dollars, unless otherwise stated.

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Charter Hall Group 2019 Annual General Meeting

Sydney Head Office

Brisbane

Sydney Head Office Melbourne Brisbane Perth Level 20, No.1 Martin Place Level 14, 570 Bourke Street Level 3, The Annex Level 5, St Georges Square Sydney NSW 2000 Melbourne VIC 3000 275 George Street 225 St Georges Terrace Brisbane QLD 4000 Perth WA 6000 T: +61 2 8651 9000 T: +61 3 9903 6100 T: +61 7 3228 2000 T: +61 8 9269 5900

Adelaide

Level 2, 80 Pirie Street Adelaide SA 5000 T: +61 8 8417 5900

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Charter Hall Group 2019 Annual General Meeting