CHARTER HALL GROUP — Annual Report 2016

Aug 21, 2016

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23 August 2016

Charter Hall Group Full Year Results

1 Shelley Street, Sydney, NSW

12 months to 30 June 2016

Agenda

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• 1 FY16 Results Summary

• 2 Property Investments

• 3 Property Funds Management

• 4 Financial Result

• 5 Outlook and Guidance

• 6 Additional Information

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David Harrison Paul Altschwager Managing Director & Chief Financial Officer Group CEO

CHARTER HALL GROUP | Full Year Results | 30 June 2016

2

FY16 Results Summary

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CHARTER HALL GROUP | Full Year Results | 30 June 2016

Key Highlights

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Group Returns Property Investments [3] Funds Management Capital Management
10.5% OEPS & Total property return FUM up 28.7% Balance sheet gearing
11.2% DPS growth 19.1% to $17.5b 0%
$3.7b in gross
25.5% [2] total 10.1% NTA per transactions Look through gearing
securityholder return security growth $1.5b gross 25.3% [4]
equity raised
$3.5b committed and
Operating earnings $165m investment
7.4% PI yield pipeline development
26.2% growth capacity [5]
activity
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1. Figures and statistics on this slide are for the 12 months to 30 June 2016 unless otherwise stated

2. Source: UBS and S&P/ASX. 12 months to 12 August 2016

3. Total property return - includes all Property Investments defined in this presentation. NTA refers to Group NTA

4. Calculated as Charter Hall’s debt (net of cash) / total assets (net of cash) of the Property Investments and Charter Hall’s balance sheet

5. Investment capacity equals total liquidity (cash plus undrawn debt facility less bank guarantees) less minimum working capital and cash required for distributions

CHARTER HALL GROUP | Full Year Results | 30 June 2016

4

Sustained Growth

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Total performance over 1, 3 and 5 years (% pa)[1]

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40%
34.3%
35%
30%
25.5%
25% 23.1%
22.2%
20.3%
19.1%
20%
15%
12.7%
10.5%
9.7%
10%
5%
0%
1 year 3 years p.a. 5 years p.a.
Charter Hall Group securityholders
S&P/ASX 200 Property Accumulation Index
Mercer/IPD Wholesale Pooled Property Funds Index
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Operating earnings per security growth[2]

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cps
35
30.4
30 27.5
25.3
25 22.9
20.7
19.2
20
15.8
15
10
5
0
FY10 FY11 FY12 FY13 FY14 FY15 FY16
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Distribution per security growth

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cps
30 26.9
24.2
25 22.3
20.2
20 18.2
16.5
15 12.6
10
5
0
FY10 FY11 FY12 FY13 FY14 FY15 FY16
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1. Source: MSCI/IPD, UBS and S&P/ASX. CHC and S&P returns are shown to 12 August 2016. IPD returns are shown to 30 June 2016

2. Operating earnings per security prior to FY14 restated to include security-based benefits expense

3. Compound annual growth rate (CAGR) from FY10 to FY16

CHARTER HALL GROUP | Full Year Results | 30 June 2016

5

Consistent Delivery on Strategy

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Manage
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Deploy

Access

Creating value Property funds through attractive management, asset investment management, leasing opportunities and development services

Access to multiple equity sources

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$17.5b FUM
$3.7b transactions
$1.5b 296 properties
$3.0b acquisitions
gross equity raised 2,550 tenants
$0.7b divestments
545 leasing deals
$9.1b transactions
$4.6b $7.6b FUM growth
$6.6b acquisitions
gross equity raised 96 additional properties
$2.5b divestments
$12.6b transactions
$6.8b $9.0b FUM growth
$9.3b acquisitions
gross equity raised 98 additional properties
$3.3b divestments
1 year
2
3 years
2
5 years
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Invest

Investing alongside our capital partners

$1.1b of property investments with 6.46% cap rate and 7.9% discount rate

WALE[1] increased by 3.2yrs to 8.8yrs

WALE[1] increased by 2.3yrs to 8.8yrs

1. WALE is weighted average lease expiry and is calculated as the sum of each fund’s WALE by gross income multiplied by its % of the Property Portfolio 2. Historical statistics include Australian FUM only

CHARTER HALL GROUP | Full Year Results | 30 June 2016

6

Property Investments

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CHARTER HALL GROUP | Full Year Results | 30 June 2016

Growth in Property Investment Earnings

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• Property investment earnings increased by 26.4%

• −Like for like growth of 5.6%

• −Change in invested capital contributed 20.8%

• Property Investment total property return of 19.1% comprising 7.4% earnings yield and 11.7% capital growth

• Portfolio WALE remained stable at 8.8 years and WACR[1] of 6.46%, 54bps decrease

Property Investment Earnings Drivers

Property Investment by Fund[2,3]

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1,200 8.0%
1,100 7.0%
1,000
6.0%
900
5.0%
800
700 4.0%
600
3.0%
500
2.0%
400
1.0%
300
200 0.0%
Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16
Property Investment Co-investment Yield
(LHS) (RHS)
Co-investment Yield (%)
Property Investment portfolio ($m)
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Other
CPIF 1%
9% CHOT
15%
CLP
15% Industrial
Office
24%
32%
CPOF
RP6 $1.1b 17%
3%
LWHP
4% Retail
44%
CQR
LWIP
21%
15%
Office Retail Industrial Hospitality
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1. WACR is the weighted average capitalisation rate for the Property Investment portfolio

2. Refer to slide 55 for Fund key

3. Previously disclosed hospitality asset class now included in Retail

CHARTER HALL GROUP | Full Year Results | 30 June 2016

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High Quality Diversified Property Portfolio

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Weighted Average Lease Expire (WALE)

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LWIP2 19.4
LWIP 18.3
CLP 9.9
LWHP 9.4
CPIF 8.4
CQR 6.9
Portfolio WALE remained
CPOF 6.5
stable at 8.8 years
RP2 5.4
CHOT 5.1
RP6 4.2
CHC 8.8
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Lease Expiry Profile[1]

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60%
50% 54% of leases expiring
between June 2024 and
40% June 2040
30%
20%
10%
0%
Retail Office Industrial
Vacant FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24-40
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Top 10 Tenants by Gross Income[2]

Occupancy by Gross Income[3]

ALH (Woolworths) 15.8% Wesfarmers 8.8% Woolworths 8.0% Government 5.5% Telstra 3.2% Metcash 1.7% Strong focus on quality of Inghams 1.2% tenant covenants Aurizon 1.1% Commonwealth Bank 1.0% Westpac 1.0%

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LWIP2 100.0%
LWIP 100.0%
CPIF 100.0%
CLP 99.7%
LWHP 99.4%
CHOT 98.1%
CQR 98.0%
CPOF 97.2% High occupancy at
98.6%
RP2 97.1%
RP6 96.8%
CHC 98.6%
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1. Previously disclosed hospitality asset class now included in Retail

2. Tenants includes subsidiaries and/or associates of corporate owner. Government tenant classification refers to all Government and Government related tenants

3. Portfolio occupancy calculated as the sum of each fund’s occupancy by gross income multiplied by its % of the Property investments

CHARTER HALL GROUP | Full Year Results | 30 June 2016

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Property Investment Portfolio Assets

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The net movement in the Property Investment Portfolio to 30 June 2016 was $154m to $1.1b:

• $157m investment including CQR, CLP and CPIF

• $101m capital return including DOF, DIF3 and CHOT

• $98m valuation growth across all investments

• A further $51m has been deployed post 30 June 16

Property Investment Movement

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$51m
$1,149m
$157m ($101m) $98m $1,098m
$944m
June 2015 Investment Capital Valuation June 2016 Additional 22 August
Return growth investment 2016
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CHPT warehousing of long WALE assets for new managed funds

• $51m (50%) investment in a new distribution center with a 16 year lease to Coles

• Additional $52m (26%) to fund completion of development Woolworths Dandenong

Property	WALE	On Balance Sheet	Completion
	(yrs)	as at 22 August	Value ($m)
		2016 ($m)
Woolworths Dandenong	20	4	56
Coles Truganina	16	51	51
Total	16	55	107

CHARTER HALL GROUP | Full Year Results | 30 June 2016

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Property Funds Management

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CHARTER HALL GROUP | Full Year Results | 30 June 2016

Group Funds Management Portfolio

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	Portfolio	Portfolio	No. of	No. of	Gross	WALE1	Occupancy	WACR2
	Value ($b)	Size (m2)	Properties	Tenants	Income ($m)	(years)	(%)	(%)
FY16	17.5	4.8	296	2,550	1,306	7.9	98.6	6.54
FY15	13.6	4.0	276	2,289	1,120	7.9	97.8	7.10

Diversification by equity source

Asset type diversification[3]

WALE by sector[3]

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9.6
Retail Equity Listed Fund 9.2
$2.5b $2.5b
Industrial Office
14% 15%
25% 47%
6.4
$17.5b $17.5b
FUM FUM
Retail
Wholesale Equity 28%
$12.5b
71% Office Retail Industrial
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1. WALE for the Property Funds Management portfolio which is measured by all tenants’ remaining leases in years, weighted by each tenant’s gross income as a proportion of the total gross income 2. WACR for the Property Funds Management portfolio and is weighted by proportion of total property assets 3. Previously disclosed hospitality asset class now included in Retail

CHARTER HALL GROUP | Full Year Results | 30 June 2016

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FUM Growth

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FUM growth driven by transaction activity and valuation uplift across all sectors

• FUM has increased $3.9b, or 28.7% during FY16 to $17.5b

• 15.9% CAGR[1] in FUM since June 2010

FUM movement

FUM[2] by equity source

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18.0 $17.5b
$17.5b $2.5b
$0.5b
+28.7% 16.0
$1.1b +3.7%
$3.0b ($0.7b) +8.1%
+22.0% (5.1%) 14.0 $13.6b $2.5b
$1.9bn
12.0 $11.5b
$12.5b
$9.9b $1.7b $2.2b
10.0
$8.5b $8.4b $1.7b $2.0b
$9.5b
$13.6b 8.0 $7.2b
$1.5b $1.5b $1.8b
$7.8b
6.0 $1.5b $3.5b $1.6b
$6.5b
$3.2b $5.4b
4.0
$3.6b
2.0
$2.5b
0.0
FY16 FUM Acquisitions Disposals Net Capex FY17 FUM Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16
Revaluations
Wholesale Listed Retail
$b
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1. Historical FUM statistics include Australian FUM only

2. CAGR from 30 June 2010 to 30 June 2016

CHARTER HALL GROUP | Full Year Results | 30 June 2016

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Property Transactions

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• During the 12 months to 30 June 2016, $3.7b of transactions were completed including $3.0b of acquisitions and $0.7b of divestments

Transactions closed during the full year to 30 June 2016

$m	Office	Industrial	Retail	TOTAL
Acquisitions	$946	$1,337	$719	$3,002
Divestments	$367	$190	$183	$740
Net transactions	$579	$1,147	$536	$2,262
Gross transactions	$1,313	$1,527	$902	$3,742
WACR (acquisitions)	5.77%	6.45%	6.58%	6.27%

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1 Shelley Street, Sydney, NSW (CPOF) Bateau Bay Square, Bateau Bay, NSW (CQR)
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267 Doherty Road, Truganina, VIC (CLP)
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CHARTER HALL GROUP | Full Year Results | 30 June 2016

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Development Activity Enhances Fund Performance

• Development opportunities undertaken to enhance both income yield and total returns for managed funds

• In-house development skills are a core competency

• Committed projects / development pipeline includes 46 office, industrial and retail projects

• Incremental potential FUM from development activity of $2.1b

Development activity (completion value $m)	Committed projects	Development pipeline2	Total1
Office	681	945	1,626
Industrial	585	961	1,546
Retail3	153	179	332
Total	1,419	2,085	3,504

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Artist impression of WSU, 167 Macquarie Street, Parramatta, NSW (CPOF/DOF)
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1. $1.4b included in FUM at 30 June 2016

2. Includes potential end value of DA approved schemes, future retail redevelopments and potential end value of industrial land banks

3. Reflects development spend only

CHARTER HALL GROUP | Full Year Results | 30 June 2016

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Equity Inflows Across the Funds Platform

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• Diversified equity sources

• $1,467m in gross equity deployed[1] ($1,099m net) during FY16 across all equity sources

	FY14	FY15	FY16
	($m)	($m)	($m)
Wholesale Pooled Funds	651	653	606
Wholesale Partnerships	261	598	467
Listed Funds2	260	274	76
Direct Funds3	277	180	318
Gross equity deployed	1,449	1,705	1,467
Net equity deployed	987	1,297	1,099

1. Equity flows includes equity received or returned only and excludes undrawn equity commitments

2. Listed Funds include equity raised in CHC and CQR placements and DRP

3. Funds and syndicates for retail, SMSF and high net worth investors

CHARTER HALL GROUP | Full Year Results | 30 June 2016

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Financial Result

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CHARTER HALL GROUP | Full Year Results | 30 June 2016

Profit and Loss

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• 26.2% growth in Operating Earnings to $124.7m

• OEPS growth of 10.5% to 30.4cps and DPS growth of 11.2% to 26.9cps

• PI operating earnings up 26.4% to $78.5m

• Invested an additional $56m (net of divestments)

• Property Investment income yield 7.4%

• PFM earnings increased by 25.7% to $71.4m with strong revenue growth in all areas

• $108m net revaluation growth adds 26cps (9.6%) to NTA

$m	FY16	FY15	Change %
Property investment	78.5	62.1	26.4%
Property funds management	71.4	56.8	25.7%
Corporate	(25.2)	(20.1)	(25.4%)
Operating earnings	124.7	98.8	26.2%
Property valuations (net)1	107.8	37.4
Amortisation and impairment of intangibles	(8.5)	(9.3)
Gain on disposal of investments and inventory1	6.1	(0.9)
Realised and unrealised losses on derivatives1	(10.3)	(5.6)
Income taxes2	(1.7)	(0.4)
Other non-operating items1	(2.9)	(2.1)
Total non-operating items	90.5	19.1
Statutory profit after tax	215.2	117.9	82.5%
OEPS (cps)	30.4	27.5	10.5%
DPS (cps)	26.9	24.2	11.2%
ROE3 (earnings)	10.8%	11.4%	(0.6%)

1. Includes the Group's proportionate share of non-operating items of equity accounted investments on a look through basis 2. Income taxes are non cash

2. Return on equity (earnings) is calculated as operating earnings divided by opening NTA adjusted for contributed equity during the year

CHARTER HALL GROUP | Full Year Results | 30 June 2016

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Segment Result

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• Modified segment reporting to reflect organisational restructure and better align with peers, including also showing a proportionately consolidated profit and loss

• Refer Appendices for reconciliation to previous segment disclosure and margin/MER disclosure

• Property investments earnings increased by 26.4%

• −Like for like growth of 5.6%

• −Change in invested capital contributed 20.8%

• Property funds management earnings increased by 25.7%. Revenue increase of 22.0% driven by strong investment management fee growth. Expense increase of 18.0% to support FUM growth including development resourcing

• Corporate and Group costs in FY16 include $5.1m restructuring

	$m	FY16	FY15	Change %
	Property investments income	78.5	63.0	24.6%
	Interest and expenses	(0.0)	(0.9)	100%
	Property investment earnings	78.5	62.1	26.4%
	Yield	7.4%	7.5%	(0.1%)
	PFM revenue	133.0	109.0	22.0%
	PFM expenses	(61.6)	(52.2)	18.0%
	PFM earnings	71.4	56.8	25.7%
	PFM margin1	55.1%	53.4%	1.7%
	Corporate	(25.2)	(20.1)	(25.4%)
	Corporate MER2	14.3bps	14.9bps	(0.6bps)
	Operating Earnings	124.7	98.8	26.2%

1. Calculated as PFM EBITDA (excludes depreciation expense allocated to PFM) divided by PFM revenue

2. Calculated as Corporate expenses divided by closing FUM, as a basis points

CHARTER HALL GROUP | Full Year Results | 30 June 2016

19

Balance Sheet and Cashflow

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Balance Sheet

• Strong balance sheet maintained

• Cash position of $145m and nil debt

• $154m increase in Property Investments made up of $56m net investments ($157m investments and $101m capital return) and $98m of net revaluations

• Property Investments represent 81% of net tangible assets

• Significant future investment capacity available of $165m

• NTA per security uplift of 28cps primarily due to cap rate compression in existing property investment portfolio

	$m	30 June 2016	30 June 2015
	Cash	145	152
	Property investments	1,098	944
	Other assets	108	104
	Intangibles	70	78
	Total assets	1,421	1,278
	Total liabilities	95	78
	Total equity	1,326	1,200
	NTA per security	$3.04	$2.76
	NAV per security	$3.21	$2.95
	Look through gearing (Inc. CHC)1	25.3%	23.9%
	Total investment capacity2	$165m	$191m

Operating Earnings to Operating Cashflow

Cashflow

• FY16 Distribution covered 118% by operating cashflow

• DRP has been suspended based on current liquidity position

• Calculated as Charter Hall’s debt (net of cash) / total assets (net of cash) of the Property Investments and Charter Hall’s balance sheet

• Investment capacity equals total liquidity (cash plus undrawn debt facility less bank guarantees) less minimum working capital and cash required for distributions

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$11.0 ($9.1)
$0.7 $3.0 $130.3
$124.7
$110.5
Operating Change in Earnings vs Security Depreciation Operating Distribution
earnings working capital distribution based-benefits cashflow paid/payable
received expense
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CHARTER HALL GROUP | Full Year Results | 30 June 2016

20

Outlook and Guidance

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CHARTER HALL GROUP | Full Year Results | 30 June 2016

Long WALE REIT Update

• Charter Hall has progressed preparations to list on the ASX a new real estate investment trust, Charter Hall Long WALE REIT

• all internal vendor approvals have now been secured

• Long WALE REIT will be a unique ASX listed REIT that owns a diversified portfolio of long WALE properties

• expected to be the counterparty of choice for sale and leaseback and long lease asset vendors

• mandate will position the REIT for future growth across varying asset classes

• delivers on a strategic goal of Charter Hall to balance the growth of its unlisted platform with listed A-REIT funds under management

• The initial portfolio will be diversified by geography and asset class containing office, industrial and hospitality properties leased to leading corporations and government tenants on long term leases in six Australian states

• CHC is proposing to sell a number of its current co-investments into Long WALE REIT[1] in exchange for Long WALE REIT securities and it is expected that the Group will have a co-investment in the REIT in excess of 20%

• CHC will earn management fees from managing Long WALE REIT on terms that are consistent with its managed funds platform

• The listing of Long WALE REIT is expected to occur in October 2016

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Artist impression, ATO Adelaide, 12-26 Franklin Street, SA (CPOF)
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Dandenong Distribution Centre, Dandenong, VIC (CPIF)
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1. 45% interest in LWIP, 26% interest in Woolworths Distribution Centre Dandenong and 50% of Coles Distribution Centre Truganina

CHARTER HALL GROUP | Full Year Results | 30 June 2016

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FY17 Outlook and Earnings Guidance

We believe the property market landscape will continue to accommodate growth

• Lower for longer low inflation low interest rate environment with record spread between discount rates and bond rates

• Relative attractiveness of commercial property

• Continued equity flows expected for institutional fund managers with strong track records

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Holden Dealership, Castle Hill, NSW (DAT1)
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Our guidance[1] is as follows:

Absent unexpected events, Charter Hall’s guidance for FY17 operating earnings per security growth over FY16 is:

• On a pre-tax basis 8-9% growth

• On a post-tax basis approximately 2% growth

The distribution payout ratio is expected to be between 85% and 95% of operating earnings per security on a post-tax basis.

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130 Lonsdale Street, Melbourne, VIC (CPOF)
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1. Guidance excludes impact of Long WALE REIT

CHARTER HALL GROUP | Full Year Results | 30 June 2016

23

Additional Information

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CHARTER HALL GROUP | Full Year Results | 30 June 2016

Additional Information

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• 1 Group Overview

• 2 Property Investments Portfolio

• 3 Financials

• 4 Capital Management and Funding

CHARTER HALL GROUP | Full Year Results | 30 June 2016

25

Appendix – Group Overview

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CHARTER HALL GROUP | Full Year Results | 30 June 2016

Charter Hall Group Property Overview

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NSW ACT VIC 8 QLD NT ~~WA~~ SA TAS Office 0 Retail 1 Industrial 1 Total m2of assets 22 2 Properties valued at $0.1b Office 8 Retail 20 Industrial 11 Total m2 of assets 794 Total employees 32 39 Properties valued at $2.7b Office 4 Retail 10 Industrial 5 Total m2of assets 275 Total employees 9 19 Properties valued at $0.9b Office 1 Retail 6 Industrial 1 Total m2of assets 74 8 Properties valued at $0.2b Office 11 Retail 29 Industrial 30 Total m2 of assets 1,523 Total employees 35 70 Properties valued at $3.9b	NSW ACT VIC 8 QLD NT ~~WA~~ SA TAS Office 0 Retail 1 Industrial 1 Total m2of assets 22 2 Properties valued at $0.1b Office 8 Retail 20 Industrial 11 Total m2 of assets 794 Total employees 32 39 Properties valued at $2.7b Office 4 Retail 10 Industrial 5 Total m2of assets 275 Total employees 9 19 Properties valued at $0.9b Office 1 Retail 6 Industrial 1 Total m2of assets 74 8 Properties valued at $0.2b Office 11 Retail 29 Industrial 30 Total m2 of assets 1,523 Total employees 35 70 Properties valued at $3.9b	Office 9 Retail 45 Industrial 20 Total m2 of assets 846 Total employees 37 74 Properties valued at $3.4b Office 15 Retail 50 Industrial 19 Total m2 of assets 1,216 Total employees 297 84 Properties valued at $6.3b
Office 8 Retail 20 Industrial 11 2
Total m of assets 794 Total employees 32 19 Properties valued at $0.9b
Office 4 Retail 10 Industrial 5 Total m2of assets 275 Total employees 9

1. Note m[2] shown in 000’s

CHARTER HALL GROUP | Full Year Results | 30 June 2016

27

Charter Hall Group Overview

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Property Funds Management Platform $17.5b FUM

• Investment management

• Transaction services

• Capital management

FUM	$17.5b
No. of properties	296
Gross income	$1.3b

• Asset management

• Property management

• Development management

• Technical services

Property Funds Management Platform $1,098m co-investments

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OFFICE INDUSTRIAL RETAIL
$348m $265m $485m
(32% of portfolio) (24% of portfolio) (44% of portfolio)
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CHARTER HALL GROUP | Full Year Results | 30 June 2016

28

Charter Hall Managed Funds

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FUM as at 30 June 2016

Office $8.1b Industrial $4.5b

Retail $4.9b

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CHOT CPOF BSWF [1] CLP CPIF LWHP RP2 LWIP
$2.3b $3.0b $0.6b $1.6b $2.0b $0.7b $0.1b $0.7b
CHOF 5 Mandates RP6 Mandates LWIP2
$83m $0.8b $0.3b $0.2b $0.1b
DOF PFA Workzone DIFs/CDC DAT DAT2
$0.8b $0.3b $0.1b $0.9b $0.1b $83m
VA CHIF 8 BW Trust
$79m $59m $90m
CQR
$2.5b
Equity
Wholesale
Retail Equity
Listed Equity
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1. Brisbane Square Wholesale Fund (BSWF) includes 67% of Bankwest Place and Brisbane Square

CHARTER HALL GROUP | Full Year Results | 30 June 2016

29

Office Sector Activity

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12 months to 30 June 2016

• Office FUM increased 19% to $8.1b

• $1.3b of transactional activity (with $946m acquisitions and $367m divestments)

• $525m acquisition of 1 Shelley Street, Sydney a prominently positioned prime-grade office building located directly adjacent to the south side of Barangaroo (50% CPOF / 50% new Wholesale investor)

• CPOF raised $303m new equity

• Continued strong performance across Office sector funds with CHOT achieving 27.2% total return for the year, and CPOF achieving 15.9%

• Continued strong development activity with three active projects with projected combined end value of $681m and a forward development pipeline of $945m

• Completed 140 leasing agreements across 218,000m[2] or 21% of the portfolio Major leasing deals included:

• 23,240m[2] renewal to Suncorp at 266 George Street, Brisbane for 5 years (CPOF); and

• 13,734m[2] renewal to Commonwealth of Australia (Department of Human Services) at 570 Bourke Street, Melbourne (CPOF)

1 Shelley Street, Sydney, NSW (50% CPOF)

	Sector overview	30 Jun 2016	30 Jun 2015	Change
	FUM No. of properties Gross income	$8.1b 48 $637m	$6.8b 48 $569m	$1.3b - $68m
	Occupancy	98.0%	96.9%	1.1%
	WALE	6.4yrs	6.5yrs	(0.1yrs)
	WACR	6.53%	7.13%	(0.60%)
	Incentives (% gross)	24.9%	26.0%	(1.1%)
	CHC co-investment	$348m	$372m	($24m)

CHARTER HALL GROUP | Full Year Results | 30 June 2016

30

Industrial Sector Activity

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12 months to 30 June 2016

• Industrial FUM increased 61% to $4.5b

• Completed $1.3b of acquisitions across 19 assets

• $190m of divestments across 12 assets as part of strategy to enhance the quality of the portfolio

• Completed 32 leasing deals totaling 402,000m[2] . Major leasing deals included:

• Target for a 10 year term over for 62,873m[2] at Drystone Estate (CLP)

• The Reject Shop for a 10 year term over 37,765m[2] at Drystone Estate (CLP)

• Current developments underway totaling 294,000m[2] with a completion value of $585m

• Forward development pipeline totaling 690,000m[2] with a completion value of $961m

Drystone Estate, VIC (CLP)

Sector overview	30 Jun 2016 30 Jun 2015	30 Jun 2016 30 Jun 2015	Change
FUM	$4.5b	$2.8b	$1.7b
No. of properties	87	76	11
Gross income	$317m	$219m	$98m
Occupancy	99.9%	98.6%	1.3%
WALE	9.6yrs	9.9yrs	(0.3yrs)
WACR	6.69%	7.43%	(0.74%)
CHC co-investment	$265m	$197m	$68m

CHARTER HALL GROUP | Full Year Results | 30 June 2016

31

Retail Sector Activity[1]

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12 months to 30 June 2016

• Retail FUM increased 23% to $4.9b

• Completed $719m of acquisitions and $183m of divestments

• Continued focus on majors WALE with completion of 10 majors leasing deals

• Completed 363 specialty leasing deals over 21,000m[2] at 2.3% spreads

• Occupancy remaining strong at 98.5%

• Continued strong development activity with seven active projects adding an additional $153m to existing assets and a forward development pipeline of $179m

• Retail sales environment – specialties and liquor strong whilst supermarket sales remain subdued due to heightened competition and price deflation

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----- Start of picture text -----

Lansell Square, Bendigo, VIC (CQR)
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	Sector overview	30 Jun 2016 30 Jun 2015	30 Jun 2016 30 Jun 2015	Change
	FUM	$4.9b	$4.0b	$0.9b
	No. of properties	161	157	4
	Gross income	$351m	$333m	$18m
	Occupancy	98.5%	98.7%	(0.2%)
	WALE	9.2yrs	9.0yrs	0.2yrs
	WACR	6.42%	6.90%	(0.48%)
	CHC co-investment	$485m	$375m	$110m

1. Previously disclosed hospitality asset class now included in Retail

CHARTER HALL GROUP | Full Year Results | 30 June 2016

32

Charter Hall Direct Activity

12 months to 30 June 2016

• Direct Retail Investor FUM increased 32% to $2.5b

• Raised over $318m of external equity

• Completed over $500m of acquisitions

• Launched two Direct Automotive Funds for a total value of $185m – Direct Automotive Trust (DAT) and Direct Automotive Trust No.2 (DAT2)

• Realised $121m ($91m above book value) at 504 Pacific Highway, St Leonards asset (Direct Office Fund)

• Maintained number 1 ranking in PIR survey of Top 10 Unlisted Retail Fund Managers

• Held 3 positions in the top 10 performing core unlisted funds at 30 June 16[1]

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----- Start of picture text -----

Artist impression, 900 Anne Street, Brisbane, QLD (CPOF/DOF)
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Sector overview	30 Jun 2016 30 Jun 2015	30 Jun 2016 30 Jun 2015	Change
FUM	$2.5b	$1.9b	$0.6b
No. of properties	49	45	4
Gross income	$199m	$168m	$31m
Occupancy	99.6%	98.8%	0.8%
WALE	9.5yrs	9.1yrs	0.4yrs
WACR	6.85%	7.56%	(0.71%)

1. The Property Council/IPD Unlisted Core Retail Property Fund Index

2. Direct assets reflected in retail, office, industrial sector statistics

CHARTER HALL GROUP | Full Year Results | 30 June 2016

33

Charter Hall Direct Funds Network

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• For the 12 months to 30 June 2016, Charter Hall Direct managed three of the top ten funds ranked by performance in The Property Council/IPD Australian Unlisted Core Retail Property Fund Index[1]

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----- Start of picture text -----

35%
30%
27% 26%
25%
21%
19%
20%
17%
16% 16%
15% 13% 13% 13% 13% 14%13% 12% 12%
9% 10% 11%10% 9% 10%9% 10%10% 11% 11% 11% 11% 10% 10% 11%11%
10% 9% 9% 9%
6%
5%
0%
2 2 2 2 3
CHIF1 CHIF2 CHIF3 CHIF4 CHIF5 CHIF6 130 Stirling 144 Stirling WZ Trust BW Trust VA Trust CDC Trust DIF1 DIF2 DIF3 PFA DOF DOF
1997 to 1997 to 1999 to 2000 to 2001 to 2004 to St Trust St Trust 2014 to 2014 to 2014 to 2014 to 2010 to 2013 to 2014 to 2012 to (Ordinary) (Wholesale
2008 2013 2013 2013 2013 2013 2010 to 2012 to 2016 2016 2016 2016 2016 2016 2016 2016 2010 to A)
2014 2016 2016 2014 to
2016
Sydney Melbourne Melbourne Sydney Sydney / Sydney Perth Office Perth Office Perth Office Australian Brisbane Adelaide Australian Australian Australian Australian Australian Australian
Industrial CBD Retail Industrial Office Melbourne Office Retail Office Industrial Industrial Industrial Industrial Office Office Office
Office
4
Net Return (% p.a.) Benchmark (% p.a.)
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1. Benchmark is MSCI/IPD Unlisted Core Wholesale Property Fund Index

2. Returns for investments with bonus units

3. Returns for investments under the entitlement offer

4. Net return represents IRR. Past performance is not an indicator of future results

CHARTER HALL GROUP | Full Year Results | 30 June 2016

34

Appendix - Property Investment Portfolio

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CHARTER HALL GROUP | Full Year Results | 30 June 2016

CHC Property Investment Portfolio

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As at 30 June 2016[1]

	Ownership Stake Charter Hall Investment Charter Hall Investment Income WALE Market Cap Rate Discount Rate FY16 Average rental reviews Charter Hall Investment Yield FY16 3 Charter Hall Investment Yield FY15 3 EPU Growth
	(%) ($m) ($m) (years) (%) (%) (%) (%) (%) (%)
Office	348 21.5 5.8 6.44% 7.6% 3.8% 6.8% 6.7%
Charter Hall Prime Office Fund (CPOF)	10.7% 183 10.3 6.5 6.44% 7.6% 3.8% 6.1% 6.6% (2.2%)
Charter Hall Office Trust (CHOT)	14.3% 164 11.2 5.1 6.33% 7.6% 3.9% 7.4% 6.7% 3.4%
PFA Diversified Property Trust (PFA)	0.1% 1 0.0 7.4 7.93% 8.5% 3.0% 8.9% 9.9% 13.3%
Industrial	265 15.9 9.4 6.63% 8.0% 3.0% 7.2% 7.5%
Core Logistics Partnership (CLP)	16.1% 170 9.3 9.9 6.58% 8.0% 3.0% 7.1% 7.1% 7.4%
Charter Hall Prime Industrial Fund (CPIF)	6.8% 95 6.6 8.4 6.70% 8.1% 3.1% 7.8% 7.9% 4.7%
Retail	485 34.3 11.2 6.38% 8.0% 3.2% 7.9% 8.2%
Charter Hall Retail REIT (CQR)2	14.3% 227 15.8 6.9 6.71% 8.1% 4.1% 8.1% 8.7% 2.4%
Long WALE Investment Partnership (LWIP)	50.0% 165 12.1 18.3 6.12% 7.9% 2.0% 8.2% 8.0% 3.3%
Long WALE Hardware Partnership (LWHP)	11.0% 47 2.6 9.4 6.00% 7.9% 3.0% 6.8% 7.3% (4.8%)
Retail Partnership No. 6 Trust (RP6)2	20.0% 32 1.7 4.2 6.00% 7.8% 3.2% 6.2% 6.5% 2.2%
Retail Partnership No. 2 (RP2)2	5.0% 6 1.7 5.4 6.00% 8.0% 4.5% 8.0% 8.4% 3.1%
Long WALE Investment Partnership 2 (LWIP2)	10.0% 8 0.4 19.4 6.33% 8.0% 2.5% 7.2% 3.6% 4.9%
Other4	6.8
Total2	1,098 78.5 8.8 6.46% 7.9% 3.4% 7.4% 7.5%

1. Weighted average property statistics based on the funds where CHC has an investment as at 30 June 2016

2. Average rent reviews is contracted weighted average rent increases of specialty tenants

3. Yield = Operating earnings divided by starting investment value (MTM) at start of the year adjusted for investments / divestments. Excludes MTM movements in NTA during the year 4. Other includes co-investment income from funds realised during the year and CIP

CHARTER HALL GROUP | Full Year Results | 30 June 2016

36

Property Investment Portfolio Net Returns

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• The Property Investment portfolio’s total property return over the five years to 30 June 2016 is 16.0% per annum, outperforming the MSCI/IPD Unlisted Wholesale Pooled Property Fund Index (NAV post fees) which returned 9.7% over the same period

• The total property return of each core Property Investment has outperformed the sector specific MSCI/IPD index over the same period

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----- Start of picture text -----

25%
20.7%
20.0%
20% 18.5%
17.2%
16.6%
16.0%
14.3%
15% 13.7%
12.1%
11.2%
10.1%
9.7% 9.7% 9.6% 9.7%
10% 8.7% 8.7% 8.7%
5%
0%
CPOF1 CPIF1 CHOT2 CQR2 RP2 & RP6 LWHP CLP LWIPs CHC3
2011 to 2016 2011 to 2016 2011 to 2016 2011 to 2016 2012 to 2016 2012 to 2016 2012 to 2016 2014 to 2016 2011 to 2016
Office Industrial Office Retail Retail Retail Industrial Diversified Diversified
Net Return (% p.a.) MSCI/IPD Benchmark (% p.a.)
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1. CPOF and CPIF net return benchmarked against MSCI/IPD Unlisted Wholesale Pooled Property Fund Index 2. CHOT (formerly CQO) and CQR starting value based on security price on ASX

2. Total property return - includes all Property Investments defined in this presentation

CHARTER HALL GROUP | Full Year Results | 30 June 2016

37

Charter Hall Prime Office Fund (CPOF)

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Key events during FY16

• CPOF acquired 900 Ann Street, Fortitude Valley a fully pre-committed development asset to Aurizon (12 year lease), scheduled for completion in May 2018

• CPOF acquired 55 King Street, Melbourne a fully leased asset with longterm re-development potential

• CPOF acquired a 50% interest of 1 Shelley St, Sydney

• Assets currently under construction include 333 George Street, Sydney, WSU, Parramatta and 900 Ann St, Brisbane

• 570 Bourke Street development complete with 98% committed space

POF)
Portfolio characteristics	Key metrics
Grosspropertyassets1	$3.0b
Total debt(look through)	$0.8b
Gearing (look through)	29.4%
Number of assets	20
Occupancy2	97.2%
Weighted average lease expiry2	6.5years
CBD and CBD fringe assets	86%
Agrade assets	99%
Weighted average caprate	6.44%
Weighted average rent review (next 12 months)	3.8%
EPUgrowth	(2.2%)
Charter Hall co-investment	$183m / 10.7%

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Geographic allocation
SA
(by GAV) 5%
WA
12%
NSW
38%
QLD
26%
VIC
19%
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Debt expiry profile (by facility limit)

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$500 $473m
$400m
$400 $365m
$300
$200
$100
$0
FY17 FY18 FY19 FY20 FY21+
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1. Represents 30 June 2016 book values including the completion value of WSU, Parramatta and 900 Ann Street, Fortitude Valley

2. Occupancy and WALE based on the core portfolio and excludes the impact of the current development 333 George Street, Sydney (under construction)

CHARTER HALL GROUP | Full Year Results | 30 June 2016

38

Charter Hall Office Trust (CHOT)

Key events during FY16

• Divested CHOT’s Newcastle, Australia Place and Parramatta assets at $23m or 19% above Dec 15 valuation

• Investment returns – achieved NOI of $44.4m (or $3.3m) above budget

• Capital management – refinancing CHOT’s $1.2b loan effective January 2016 ($1m annual savings)

• Capital return – $175m returned to Investors

• Valuations – Avaya House and 5 Queens externally valued with a combined net uplift of $29.0m (or 17.6%)

• Sustainability – 171 Collins Street achieved 6 Green Star NABERS Energy rating and submitted CHOT’s maiden Global Real Estate Sustainability Benchmark (GRESB) application

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Geographic allocation
(by GAV) WA
QLD 2%
9%
VIC
NSW
27%
62%
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Portfolio characteristics	Key metrics
Grosspropertyassets	$2.3b
Total debt	$1.1b
Gearing (balance sheet)	47.8%
Number of assets	12
Occupancy	98.1%
Weighted average lease expiry	5.1years
CBD assets	85%
Primegrade assets	94%
Weighted average caprate	6.33%
Weighted average rent review(next 12 months)	3.9%
EPUgrowth	3.4%
Charter Hall co-investment	$164m / 14.3%

Debt expiry profile (by facility limit)

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$450
$400m $400m $400m
$400
$350
$300
$250
$200
$150
$100
$50
$0
FY16 FY17 FY18 FY19 FY20+
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CHARTER HALL GROUP | Full Year Results | 30 June 2016

39

Core Logistics Partnership (CLP)

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Key events during FY16

• Acquired four investments (Parkwest Estate $189m, Gepps Cross $46m, Stockyards Estate $120m (50%) & Centurion Hazelmere $46.7m) and one development site (Drystone Estate land $26.2m)

• Completed three pre-leased facilities (Woolworths Drystone $91.8m, Laverton Cold Storage Drystone $17.8m & Cascade Connectwest $11.6m)

• Portfolio gross assets of $1.6b including current pre-leased forward funded developments underway including Target $79.1m, Reject Shop $42.9m, Rand $20.4m & Couriers Please $15.7m (all at Drystone Estate and all shown as values on an as if completed basis)

	Portfolio characteristics	Key metrics
	Gross property assets	$1.6b
	Total debt	$0.4b
	Gearing (balance sheet)	28.5%
	Number of assets	27
	Occupancy	99.7%
	Weighted average lease expiry	9.9 years
	Weighted average cap rate	6.58%
	Weighted average rent review (next 12 months)	3.0%
	EPU growth	7.4%
	Charter Hall co-investment	$170m / 16.1%

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Geographic allocation
(by GAV) SA NSW
TAS
7% 6%
3%
WA
18%
QLD VIC
10% 56%
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Debt expiry profile (by facility limit)

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$450m
$450
$400
$350
$300
$250
$200
$150
$100
$50
$0
FY16 FY17 FY18 FY19 FY20+
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CHARTER HALL GROUP | Full Year Results | 30 June 2016

40

Charter Hall Prime Industrial Fund (CPIF)

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Key events during FY16

• CPIF is one of the highest ranked unlisted wholesale property fund[1] (all sectors) over the 3 years to 30 June 2016 according to Mercer / IPD Wholesale Pooled Property Funds Index benchmark data

• CPIF Unitholders unanimously approved the appointment of a new Responsible Entity with a dedicated Board that comprises 3 independent Directors and 2 executive Directors

• Over FY16 the Fund reached $2.0b in gross asset value and is now diversified across 44 assets with 100% occupancy and a 8.4 year WALE

• CPIF controls a 60ha land bank spread across multiple sites with capacity to deliver up to 300,000m[2] or $500m of investment product

(CPIF)
Portfolio characteristics	Key metrics
Gross property assets	$2.0b
Total debt	$0.2b
Gearing (balance sheet)	14.3%
Number of assets	44
Occupancy	100%
Weighted average lease expiry	8.4 years
Weighted average cap rate	6.70%
Weighted average rent review (next 12 months)	3.1%
EPU growth	4.7%
Charter Hall co-investment	$95m / 6.8%

Geographic allocation

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(by GAV) TAS SA
NT 4% 3%
2% NSW
30%
WA
23%
VIC
QLD 12%
26%
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Debt expiry profile (by facility limit)

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$350 $325m
$300
$250
$200
$150
$100
$50 $24m
$0
FY16 FY17 FY18 FY19 FY20+
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1. Source: MSCI/IPD Wholesale Pooled Property Funds Index – multi asset funds

CHARTER HALL GROUP | Full Year Results | 30 June 2016

41

Charter Hall Retail REIT (CQR)

Key events during FY16

• Acquired a 47.5% interest in Charter Hall Retail Partnership No. 2 Trust, which owns Bateau Bay Square. This was partially funded via a placement of 11.0 million units of the REIT with Charter Hall Group at a price of $4.1167

• Acquired Goulburn and Katherine, two sub-regional shopping centres for a total acquisition price of $94.9m at an initial yield of 7.2%

• Debt restructure completed increasing weighted average debt maturity to 6.7 years on completion with 50% of the fund’s debt termed out past 10 years

• Completion of major redevelopment at Lansell (VIC) and commenced major redevelopments at Secret Harbour (WA) and Lake Macquarie/Mount Hutton

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Geographic allocation
(by GAV)
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----- Start of picture text -----

NT SA
1% 6%
Vic.
11%
NSW
43%
WA
14%
QLD
20%
ACT
TAS
4%
1%
1. For specialty stores only
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	Portfolio characteristics	Key metrics
	Grosspropertyassets	$2.5b
	Total look through debt(net of cash)	$0.9b
	Gearing (look through)	35.9%
	Total number of assets	74
	Occupancy (weighted on GLA)	98.0%
	Anchor WALE	10.6years
	Weighted average caprate	6.71%
	Weighted averaged rent review1 (next 12 months)	4.1%
	EPUgrowth	2.4%
	Charter Hall co-investment	$227m / 14.3%

Debt expiry profile (by facility limit)

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$400
$350 $335m
$300
$252m
$250
$200
$177m
$150m
$150
$100
$50
$0
FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27+
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CHARTER HALL GROUP | Full Year Results | 30 June 2016

42

Long WALE Investment Portfolio (LWIP)

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Key events during FY16

• $679m portfolio of 54 ALH leased hotels including 18 Dan Murphy’s

• Portfolio WALE of 18.3 years at June 2016 with CPI annual rental increases

• 30 June 2016 weighted average cap rate of 6.12%

• Interest rate hedges in place with an average 2.6 year remaining term at an average base rate of 3.12%

	Portfolio characteristics	Key metrics
	Gross property assets	$0.7b
	Total debt	$0.3b
	Gearing (balance sheet)	51.5%
	Number of assets	54
	Occupancy	100%
	Weighted average lease expiry	18.3 years
	Weighted average cap rate	6.12%
	Weighted average rent review (next 12 months)	CPI
	EPU growth	3.3%
	Charter Hall co-investment	$165m / 50%

Geographic allocation (by GAV)

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SA NSW
TAS 7% 3%
3%
WA
11%
VIC
39%
QLD
37%
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Debt expiry profile (by facility limit)

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----- Start of picture text -----

$180 $170m $170m
$160
$140
$120
$100
$80
$60
$40
$20
$0
FY17 FY18 FY19 FY20 FY21+
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CHARTER HALL GROUP | Full Year Results | 30 June 2016

43

Appendix - Financials

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CHARTER HALL GROUP | Full Year Results | 30 June 2016

Key Financial Metrics

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Group	FY16	FY15	Change
Statutory profit after tax	$215.2m	$117.9m	82.5%
Operating earnings	$124.7m	$98.8m	26.2%
Operating earnings per security (OEPS)	30.4cps	27.5cps	10.5%
Distribution per security (DPS)	26.9cps	24.2cps	11.2%
Return on Equity1 (earnings)	10.8%	11.4%	(0.6%)
Balance Sheet	At 30 June 2016	At 30 Jun 2015	Change
Funds under management	$17.5b	$13.6b	28.7%
Total Group assets	$1,421m	$1,278m	11.2%
NAV per security	$3.21	$2.95	8.8%
NTA per security	$3.04	$2.76	10.1%
Balance sheet gearing2	0.0%	0.0%	-
Look through gearing (Inc. CHC)3	25.3%	23.9%	1.4%
PI look through gearing (Ex. CHC)4	34.8%	36.5%	(1.7%)

1. Return on equity (earnings) is calculated as operating earnings divided by opening NTA plus contributed equity during the year

2. Debt (net of cash) / Gross assets (less cash)

3. Calculated as Charter Hall’s debt (net of cash) / total assets (net of cash) of the Property Investments and Charter Hall’s balance sheet

4. As above excluding Charter Hall balance sheet

CHARTER HALL GROUP | Full Year Results | 30 June 2016

45

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Reconciliation of Segment Result to Previous Disclosure – FY16

Following table reconciles from the previous segment disclosure and the changes made to arrive at the new segment disclosure

$m Previous Disclosure CIP1 Restructuring expense2 Depreciation expense3 Unallocated Corporate expense4 Security- based benefit5 FY16 Segments	$m Previous Disclosure CIP1 Restructuring expense2 Depreciation expense3 Unallocated Corporate expense4 Security- based benefit5 FY16 Segments
Property Investment Income 75.3 3.2 - - - - 78.5
Interest 1.1 - - - - - 1.1
Expenses (1.1) - - - - - (1.1)
Property Investment Earnings 75.3 3.2 - - - - 78.5
PFM revenue 136.2 (3.2) - - - - 133.0
PFM expenses (83.4) - 5.1 - 19.0 (0.4) (59.7)
Depreciation expense (2.6) - - 0.7 - - (1.9)
PFM Earnings 50.2 (3.2) 5.1 0.7 19.0 (0.4) 71.4
PFM Margin6 38.7% 55.1%
Corporate expenses - - - - (19.0) - (19.0)
Restructuring costs - - (5.1) - - - (5.1)
Security-based benefit expense (0.8) - - - - 0.4 (0.4)
Depreciation expense - - - (0.7) - - (0.7)
Corporate (0.8) - (5.1) (0.7) (19.0) 0.4 (25.2)
Total Operating Earnings 124.7 - - - - - 124.7

• 1) CIP profit after tax re-classified to Property Investments as earnings are generated by development activities in 50% investment in CIP and not Funds Management

• 2) Restructure costs reclassified from PFM expenses to Unallocated Corporate as the costs are not directly attributable to revenue generating divisions and are a result of corporate initiated decisions

• 3) Component of depreciation expense related to Corporate

• 4) Unallocated Corporate expenses includes the costs to manage the listed stapled entity of CHC and non sector costs of managing the group wide platform. These include the

• 24.5 Board, CEO, CFO, heads of group wide functions (People and IT), group finance, CHC investor relations and group marketing

• 5) Component of security-based benefits expense related to Unallocated Corporate

• 6) PFM margin calculated as PFM earnings (excluding depreciation expense) divided by PFM revenue

CHARTER HALL GROUP | Full Year Results | 30 June 2016

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Reconciliation of Segment Result to Previous Disclosure – FY15

Following table reconciles from the previous segment disclosure and the changes made to arrive at the new segment disclosure

$m Previous Disclosure CIP1 Restructuring expense2 Depreciation expense3 Unallocated Corporate expense4 Security- based benefits5 FY15 Segments	$m Previous Disclosure CIP1 Restructuring expense2 Depreciation expense3 Unallocated Corporate expense4 Security- based benefits5 FY15 Segments
Property Investment Income 59.2 3.8 - - - - 63.0
Interest 0.1 - - - - - 0.1
Expenses (1.0) - - - - - (1.0)
Property Investment Earnings 58.3 3.8 - - - - 62.1
PFM revenue 112.8 (3.8) - - - - 109.0
PFM expenses (67.6) - 1.3 - 17.0 (1.4) (50.7)
Depreciation expense (2.0) - - 0.5 - - (1.5)
PFM Earnings 43.2 (3.8) 1.3 0.5 17.0 (1.4) 56.8
PFM Margin6 40.1% 53.4%
170 170
Corporate expenses - - - - (.) - (.)
Restructuring costs - - (1.3) - - - (1.3)
Security-based benefit expense (2.7) - - - - 1.4 (1.3)
Depreciation expense - - - (0.5) - - (0.5)
Corporate (2.7) - (1.3) (0.5) (17.0) 1.4 (20.1)
Total Operating Earnings 98.8 - - - - - 98.8

• 1) CIP profit after tax re-classified to Property Investments as earnings are generated by development activities in 50% investment in CIP and not Funds Management

• 2) Restructure costs reclassified from PFM expenses to Unallocated Corporate as the costs are not directly attributable to revenue generating divisions and are a result of corporate initiated decisions

• 3) Component of depreciation expense related to Corporate

• 4) Unallocated Corporate expenses includes the costs to manage the listed stapled entity of CHC and non sector costs of managing the group wide platform. These include the Board, CEO, CFO, heads of group wide

• 19.7 functions (People and IT), group finance, CHC investor relations and group marketing

• 5) Component of security-based benefits expense related to Unallocated Corporate

• 6) PFM margin calculated as PFM earnings (excluding depreciation expense) divided by PFM revenue

CHARTER HALL GROUP | Full Year Results | 30 June 2016

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Operating Expenses and MER

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Following table shows total expenses split by segment, using the revised segment disclosure adopted for FY16 and the previous disclosure split

	FY16 Previous	FY16	FY15 Previous	FY15
	Disclosure	Segments	Disclosure	Segments
FUM $b	17.5	17.5	13.6	13.6
$m
PI expenses	1.1	1.1	1.0	1.0
PFM expenses	83.5	61.6	67.6	52.2
Corporate expenses	-	24.5	-	19.6
Security-based benefit expense	0.7	-	2.7	-
Depreciation	2.6	0.7	2.0	0.5
Total expenses	87.9	87.9	73.3	73.3
Corporate MER1	n/a	14.3	n/a	14.9

1. Corporate MER is total Corporate including depreciation divided by closing FUM. Corporate MER (excluding restructuring expenses) is 11.4bps in FY16 and 13.9bps in FY15

CHARTER HALL GROUP | Full Year Results | 30 June 2016

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Segment Earnings – Proportional Basis

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• On a look through basis to fund investments, CHC generates 81.4% of EBITDA from real estate ownership and development activities

• Net development EBITDA represents contribution from 50% owned CIP

	FY16 $m Propertyrental income	Property Investments 146.7	Property Funds Management -	Corporate -	Total 146.7
	Property expenses	(28.8)	-	-	(28.8)
	Managementrevenue Net property developmentEBITDA1 Net operating expenses	- 6.2 (1.1)	119.6 - (61.9)	- - (24.5)	119.6 6.2 (87.5)
	EBITDA Property investment EBITDA as a % of total EBITDA	123.0 78.7%	57.7	(24.5)	156.2
	Inter-segmentfees and expenses 2	(11.3)	15.6	-	4.3
	Depreciationand amortisationexpense	(0.6)	(1.9)	(0.7)	(3.2)
	Netinterest expense	(31.2)	-	-	(31.2)
	Income taxexpense	(1.4)	-	-	(1.4)
	Operating earnings	78.5	71.4	(25.2)	124.7
	OtherSegmentItems:
	Realisedgains/(losses)on disposal of investments3	22.4
	Property investment EBITDA as % of total EBITDA, including realised gains/(losses)4	81.4%

1. CIP EBITDA less depreciation, interest and tax = $3.2m profit after tax

2. Inter-segment fees and expenses are made up of fees and expenses paid by the funds to the Group whether treated as expenses or capitalised by the fund

3. Realised gains/(losses) are calculated on property disposals based on sales price less historical acquisition costs plus capital expenditure on a look through basis

4. This ratio is calculated by dividing the Property Investments EBITDA plus the realised gains/(losses) on disposal of investments by the total EBITDA plus realised gains/(losses) on disposal of investments

	Reconciliation of Property and management revenue as per Segment Note to Funds Management Income	FY16	FY15
	PFM Revenueper segment note Add: Inter-segment fees and expenses	119.6 15.6	98.3 12.5
	Less: Inter-segment expense recoveries PFM Revenue	(2.2) 133.0	(1.7) 109.1
	PFM EBITDA Expensesper segment note Less: Inter-segment expense recoveries	(61.9) 2.2	(52.4) 1.7
	Add: Depreciation PFM Expenses	(1.9) (61.6)	(1.5) (52.2)

CHARTER HALL GROUP | Full Year Results | 30 June 2016

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Property Funds Management Operating Earnings

$m	FY16	FY15	Change	Change %
Revenue
Fund management fees	62.6	49.9	12.7	25.5%
Transaction and performance fees	30.7	20.5	10.2	49.8%
Investment management	93.3	70.4	22.9	32.5%
Property management fees	16.0	15.0	1.0	6.7%
Development management fees	8.2	6.8	1.4	20.6%
Leasing fees	11.2	12.9	(1.7)	(13.2%)
Facilities and project management fees	4.3	4.0	0.3	7.5%
Property services	39.7	38.7	1.0	2.6%
Total funds management revenue	133.0	109.0	24.0	22.0%
Net operating expenses	(59.7)	(50.7)	(9.0)	17.8%
Depreciation	(1.9)	(1.5)	(0.4)	26.7%
Operating earnings: Property Funds Management	71.4	56.8	14.6	25.7%

CHARTER HALL GROUP | Full Year Results | 30 June 2016

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Appendix – Capital Management and Funding

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CHARTER HALL GROUP | Full Year Results | 30 June 2016

Debt and Capital Management

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• Substantial funding capacity available across the funds platform

• $7.5b of debt facilities across 29 funds and the Group

• $1.7b available undrawn debt plus $0.4bn of cash

• $1.5b of new debt facilities and $3.8b of refinanced debt in FY16

• Look through weighted average debt maturity¹ of 3.8 years up from 3.2 years

Key Debt Metrics

	Managed Funds Platform	Jun 16	Jun 15
	Groupfacilitylimit ($m)	7,527	6,336
	Groupundrawn debt ($m) Totalgroupcash ($m)	1,667 431	1,667 262
	Look throughgearing(%)	25.3%	23.9%
	CHC look through weighted average debt maturity(yrs.)1	3.8	3.2
	Look through weighted average cost of debt2	4.55%	4.88%
	Look through interest rate hedging(%)	70%	79%

• WACD² is 4.55% down from 4.88%

Debt Facility by Sector¹

• Interest rate hedging to 70%, down from 79% across the funds platform

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----- Start of picture text -----

40.1%
3,500
Undrawn
3,000 Drawn
2,500
37.2%
2,000
23.1%
1,500
1,000
500
25.3%
0
Corporate Office Retail Industrial
Debt Facility ($m)
----- End of picture text -----

• 1.Debt duration is based on facility limits

• 2.Passing cost of debt is on a look through basis and includes floating rate, hedge rate, margins, line fee but excludes undrawn line fees and amortised borrowing costs

CHARTER HALL GROUP | Full Year Results | 30 June 2016

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Debt Maturity Profile

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• Weighted average maturity at 30 June 2016 is 4.0 years up from 3.5 at 30 June 2015

• CHC Look through weighted average maturity at 30 June 2016 is 3.8 years

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----- Start of picture text -----

Group CHC - Look through
2,424
2,500 350
322
1,978 300
2,000 273
1,656 250
1,500 204
200
150
1,000
100
535
456 435 65
500
50
43
6 2
- -
FY17 FY18 FY19 FY20 FY21 FY22 FY26+ FY17 FY18 FY19 FY20 FY21 FY22 FY26+
Corporate Office Retail Industrial Corporate Office Retail Industrial Series7
Debt Facilities ($m) Debt Facilities ($m)
----- End of picture text -----

CHARTER HALL GROUP | Full Year Results | 30 June 2016

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CHC Property Investments Hedge Maturity Profile

• The hedge portfolio has a duration of 3.9 years

• The passing weighted average hedge rate is 3.20%

• The passing weighted average cost of debt is 4.55%

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----- Start of picture text -----

600 3.50%
3.00%
500
2.50%
400
2.00%
300
70% 66% 1.50%
64%
200
1.00%
45%
100
31% 0.50%
17%
- 0.00%
FY17 FY18 FY19 FY20 FY21 FY22
Hedge Profile¹ % Hedged Hedge rate³
Hedge ($m)
Weighted Average Hedge Rate (%)
----- End of picture text -----

1. Interest rate hedging as at 30 June 2016 on a look through basis

2. Current Drawn Debt as at 30 June 2016 and is projected on a straight line basis for illustrative purposes only

3. Hedge Rate is the look through weighted average rate as at 30 June 2016

CHARTER HALL GROUP | Full Year Results | 30 June 2016

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Fund Key

Listed Entities
CHC	Charter Hall Group
CQR	Charter Hall Retail REIT

Wholesale (Pooled and	Partnerships)
BSWF	Brisbane Square Wholesale Fund
CHOT (Partnership)	Charter Hall Office Trust
CLP (Partnership)	Core Logistics Partnership
CPIF (Pooled)	Charter Hall Prime Industrial Fund
CPOF (Pooled)	Charter Hall Prime Office Fund
LWHP	Long WALE Hardware Partnership
LWIP	Long WALE Investment Partnership
LWIP2	Long WALE Investment Partnership No. 2
RP1	Retail Partnership No.1
RP2	Retail Partnership No.2
RP6	Retail Partnership No.6
Funds being realised
CHOF5	Charter Hall Opportunity Fund 5

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Direct Funds

BW Trust	BW Trust (Direct syndicate)
CDC	Charter Hall Direct CDC Trust
CHIF8	144 Stirling Street Trust
DIF, DIF2, DIF3	Direct Industrial Fund series
DOF	Direct Office Fund (Formerly Charter Hall Direct Property Fund)
PFA	PFA Diversified Fund
VA	Charter Hall Direct VA Trust
DAT	Charter Hall Direct Automotive Trust
Other
CAGR	Compound Annual Growth Rate
Cap Rate	Capitalisation Rate
FUM	Funds Under Management
NTA	Net Tangible Assets
OEPS	Operating Earnings per Security
PFM	Property Funds Management
PI	Property Investments
WACR	Weighted Average Cap Rate
WALE	Weighted Average Lease Expiry

CHARTER HALL GROUP | Full Year Results | 30 June 2016

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About Charter Hall Group

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Charter Hall Group (ASX:CHC) is one of Australia’s leading fully integrated property groups, with over 25 years’ experience managing high quality property on behalf of institutional, wholesale and retail clients. As at 30 June 2016 Charter Hall had $17.5 billion of funds under management across the office, retail and industrial sectors. The Group has offices in Sydney, Melbourne, Brisbane, Adelaide and Perth.

The Group’s success is underpinned by a highly skilled and motivated team with diverse expertise across property sectors and risk-return profiles. Sustainability is a key element of its business approach and by ensuring its actions are commercially sound and make a difference to its people, customers and the environment, Charter Hall can make a positive impact for its investors, the community and the Group.

CHARTER HALL GROUP | Full Year Results | 30 June 2016

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Contact Us

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David Harrison Managing Director & Group CEO

Charter Hall Group T: +61 2 8651 9142 david.harrison@charterhall.com.au

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Richard Stacker Global Head of Investor Relations

Charter Hall Group

T: +61 2 8651 9260

richard.stacker@charterhall.com.au

DISCLAIMER

This presentation has been prepared by Charter Hall Group (being Charter Hall Limited (ABN 57 113 531 150) and Charter Hall Funds Management Limited (ABN 31 082 991 786) (AFSL 262861) as the responsible entity for Charter Hall Property Trust (ARSN 113 339 147)) (the “Group”). It is a presentation of general background information about the Group’s activities as at 30 June 2016 unless otherwise stated. It is a summary and does not purport to be complete. It is to be read in conjunction with the Charter Hall Financial Report filed with the Australian Securities Exchange on 22 August 2016. It is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor. A reader should, before making any decisions in relation to their investment or potential investment in the Charter Hall Group, seek their own professional advice. This presentation is not an offer or invitation for subscription or purchase of securities or other financial products.

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Paul Altschwager Chief Financial Officer

Charter Hall Group

T: +61 2 8651 9242 paul.altschwager@charterhall.com.au

Indications of, and guidance on, future earnings and financial position and performance are “forwardlooking statements”. Due care and attention has been used in the preparation of forward-looking statements. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of the Group, that may cause actual results to differ materially from those expressed or implied in such statements. There can be no assurance that actual outcomes will not differ materially from these statements. All information here in is current as at 30 June 2016 unless otherwise stated, and all references to dollars ($) or A$ are Australian Dollars unless otherwise stated.

CHARTER HALL GROUP | Full Year Results | 30 June 2016

57

Sydney Head Office Level 20, No.1 Martin Place Sydney, NSW, 2000 T: +61 2 8651 9000

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Melbourne Level 12, 570 Bourke Street Melbourne VIC 3000 T: +61 3 9903 6100

Brisbane

Level 22, Northbank Plaza 69 Ann Street Brisbane QLD 4000 T: +61 7 3228 2000

Perth

Level 5, St Georges Square 225 St Georges Terrace Perth WA 6000 T: +61 8 9269 5900

Adelaide

Suite 604, 147 Pirie Street Adelaide SA 5000 T: +61 8 8417 5900

www.charterhall.com.au