CHARTER HALL GROUP — Capital/Financing Update 2020

Nov 11, 2020

Charter Hall Group (CHC) Market Update

Coles Distribution Centre, Edinburgh SA

Equity Flows YTD $1.8bn

FUM Growth YTD $2.9bn

Transactions YTD $3.4bn Investment Capacity $6.5bn

Funds Under Management $43.4bn

Upgraded FY21 OEPS of approx. 53cpu

Charter Hall continues to enjoy strong support from capital partners. Since June 30, the Group has raised a total of $1.8 billion, with successful raising activity in the Charter Hall Prime Industrial Fund (CPIF), Charter Hall Long WALE REIT (ASX:CLW), the creation of a new Wholesale Partnership with Dutch pension fund PGGM and continued on-going inflows to the Direct suite of funds. Investment capacity across the platform now stands at $6.5 billion.

The Group continues to find opportunities to deploy capital in Industrial and Logistics, Long WALE Retail and Social Infrastructure that are consistent with our long WALE investment mandates and meet our capital partners target IRRs. Since 30 June, the Group has conducted $3.4 billion of gross transactions with $2.7 billion of net acquisitions. Sale and leaseback transactions have figured prominently as the Group continues to partner with tenants to find optimal solutions for their property needs.

Group FUM now stands at $43.4 billion following this equity raising and deployment activity.

In light of this activity, based on no material change in current market conditions and assuming the COVID-19 operating environment does not deteriorate from here, the Group upgrades FY21 earnings guidance to post-tax operating earnings per unit of approximately 53 cents from previous guidance of 51 cents. Distribution per security guidance remains unchanged at 6% growth over FY20.

We have enjoyed another strong start to the year, with on-going support from our capital partners and clear endorsement of our Long WALE investment strategies. Our partnership approach has also made us a compelling choice for tenants. This has seen us continue to build our sale and leaseback portfolio, further extending existing relationships, while establishing new ones. It’s also very pleasing to be able to announce our new partnership with PGGM and we look forward to building this into another successful long-term strategy.

Managing Director and Group CEO, David Harrison

Charter Hall Market Update

Note: All figures at 31 October 2020 unless otherwise stated.

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Funds under management

YTD FY21 FUM growth of $2.9bn (7.2%) to $43.4bn

Funds under management has grown $2.9 billion predominantly driven by growth in Long WALE Retail and Industrial & Logistics portfolios. This reflects the strong investment demand for these products and Charter Hall’s ability to successfully deploy capital in these asset classes.

Long WALE Retail growth has been concentrated in petrol station convenience retail property. During the period the Group established the Ampol partnership fund with sovereign weal ~~th fund GIC and further expanded the bp partnership to~~ incor ~~porate the majority of bp’s owned assets in New Zealand.~~

These two partnerships demonstrate Charter Hall’s emphasis on looking to grow with existing capital and tenant partners. Industrial & Logistics FUM growth has also been strong. Highlights include the creation of the new Charter Hall PGGM Industrial Partnership (CHPIP) and several successful sale and leaseback transactions including the Visy portfolio and the ALDI portfolio of logistics assets.

Development WIP and pipeline continues to grow across ~~logistics and ofce sectors.~~

Diversification by equity source

Diversification by asset type

==> picture [578 x 490] intentionally omitted <==

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

Social Infrastructure
Retail Equity $2.9bn
$6.1bn 6.6%
14.0% SC Retail
$3.7bn
8.5% Industrial & Logistics
$11.5bn
26.5%
Long W Long WALE Retail
$5 $5.3bn
Listed Funds 12.2%
$8.8bn20.2% $43.4bn $43.4bn
Wholesale sale
Equity $28.6bn 8.6bn
65.8% %
Office
$20.0bn
46.1%
Funds under management by equity source ($bn)
Wholesale Listed Retail
$43.4bn
$40.5bn
$6.1bn
$6.1bn
$8.8bn
$30.4bn $8.2bn
$5.0bn
$28.6bn
$23.2bn $26.3bn
$6.3bn
$19.8bn $2.9bn
$17.5bn
$2.8bn $4.4bn
$19.2bn
$13.6bn $2.5bn $4.1bn
$15.9bn
$1.9bn $2.5bn
$2.2bn $12.4bn $12.9bn
$9.5bn
Jun-15 Jun-16 Jun-17 Jun-18 Jun-19 Jun-20 Oct-20
28.7% 13.7% 17.0% 31.1% 33.2% 7.2%
ALDI Distribution Centre, Dandenong VIC
----- End of picture text -----

Charter Hall Market Update

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Equity flows

YTD FY21 Equity flows led by CPIF & new partnerships

Charter Hall continues to attract equity inflows across all source segments, with $1.8 billion of new equity invested since 30 June 2020. Equity flows are particularly strong in the Industrial & Logistics sector with Wholesale funds and partnership very active during the period. CPIF successfully closed a $1.25 billion raise early in FY21 and is in the process of undertaking another equity raise, due to close soon. When combined, this will take the number of wholesale investors across the platform to over 100.

Also notable in the period was the creation of a new partnership fund with Singaporean sovereign wealth fund GIC to house the Ampol convenience retail assets. This continues a longstanding successful relationship with GIC and their investment across multiple Charter Hall strategies.

Charter Hall is also pleased to announce the creation of a new partnership with Dutch pension fund PGGM. PGGM are a highly experienced global real estate investor and have chosen to partner with Charter Hall to invest in a diversified portfolio of Australian industrial, logistics, manufacturing and last mile distribution properties. The initial fund portfolio is approximately $300 million of assets. PGGM has an 88% interest and Charter Hall a 12% interest.

Within the listed funds, Charter Hall Long WALE REIT raised $126 million of equity to secure their interest in the expanded bp partnership and to fund further opportunities.

Direct funds also continue to experience strong inflows, averaging approximately $70 million a month. The Direct Industrial Fund No.4 (DIF4) is a beneficiary of both its scale and quality of investment portfolio and as such is currently attracting significant inflows.

	($m) FY17 FY18 FY19 FY20 Wholesale pooled funds 776 649 1,802 1,272 Wholesale partnerships 217 322 219 1,298 Listed funds 988 77 692 1,369 Direct funds 355 653 691 1,136	($m) FY17 FY18 FY19 FY20 Wholesale pooled funds 776 649 1,802 1,272 Wholesale partnerships 217 322 219 1,298 Listed funds 988 77 692 1,369 Direct funds 355 653 691 1,136	($m) FY17 FY18 FY19 FY20 Wholesale pooled funds 776 649 1,802 1,272 Wholesale partnerships 217 322 219 1,298 Listed funds 988 77 692 1,369 Direct funds 355 653 691 1,136	($m) FY17 FY18 FY19 FY20 Wholesale pooled funds 776 649 1,802 1,272 Wholesale partnerships 217 322 219 1,298 Listed funds 988 77 692 1,369 Direct funds 355 653 691 1,136	($m) FY17 FY18 FY19 FY20 Wholesale pooled funds 776 649 1,802 1,272 Wholesale partnerships 217 322 219 1,298 Listed funds 988 77 692 1,369 Direct funds 355 653 691 1,136	($m) FY17 FY18 FY19 FY20 Wholesale pooled funds 776 649 1,802 1,272 Wholesale partnerships 217 322 219 1,298 Listed funds 988 77 692 1,369 Direct funds 355 653 691 1,136	FY21 YTD 731 765 126 210 1,832 1,753
	($m)	FY17	FY18	FY19	FY20		FY21 YTD
	Wholesale pooled funds	776	649	1,802	1,272		731
	Wholesale partnerships	217	322	219	1,298		765
	Listed funds	988	77	692	1,369		126
	Direct funds	355	653	691	1,136		210
	Gross equity invested	2,336	1,701	3,404	5,076		1,832
	Net equity invested	1,689	1,487	3,287	4,585		1,753

Transaction activity

YTD FY21 transactional activity led by Industrial & Logistics and Long WALE Retail

Gross transactions were $3.4 billion. Acquisitions for the period totalled $3.0 billion. Offsetting acquisitions were disposals of $0.4 billion. Charter Hall continues to see ~~portfolio curation as an important part of driving investment~~ returns and during the period the Group selectively disposed a number of assets in the Direct funds, taking advantage of opportunities to realise strong returns for investors.

Acquisitions were heavily skewed to sale and leaseback transactions across the platform with a mix of new and ~~existing tenant partners. Highlights in the period included~~ Ampol, bp New Zealand, Visy and the QUBE Minto acquisition.

The Group continues to progress a number of off-market opportunities across all sectors, looking to utilise its sale and leaseback expertise and continue partnering with tenants for ~~mutual advantage.~~

Transaction activity continues to reflect the on-going ~~investment demand for Industrial & Logistics, Long WALE Retail and Social Infrastructure exposure. Ofce transactions~~ across the market have continued to track below historical averages. Despite this, strong offshore interest continues to ~~be seen for Australian ofce in the key Sydney and Melbourne~~ markets and the Group expects office transaction pricing will ~~remain frm and reflect the large gap between ofce yields~~ and the 10-year bond rate.

	FY21 YTD ($m) Industrial & Logistics Long WALE Retail Office Social Infrastructure / Other Shopping Centre Retail Total Acquisitions 1,146 1,408 204 286 - 3,045 Divestments (156) (105) - (59) (57) (377) Net transactions 990 1,303 204 227 (57) 2,668 Gross transactions 1,302 1,513 204 345 57 3,421

Charter Hall Market Update

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Charter Hall Group (ASX: CHC)

With over 29 years’ experience in property investment and funds management, we’re one of Australia’s leading fully integrated property groups. We use our property expertise to access, deploy, manage and invest equity across our core sectors – Office, Industrial & Logistics, retail and social infrastructure.

Operating with prudence, we’ve carefully curated a $43.4 billion diverse portfolio of over 1,300 high quality, long leased properties. Partnership and financial discipline are at the heart of our approach. Acting in the best interest of customers and communities, we combine insight and inventiveness to unlock hidden value. Taking a long term view, our $6.6 billion development pipeline delivers sustainable, technologically enabled projects for our customers.

The impacts of what we do are far-reaching. From helping businesses succeed by supporting their evolving workplace needs, to providing investors with superior returns for a better retirement, we’re powered by the drive to go further.

Charter Hall Limited ACN 113 531 150

Charter Hall Funds Management Limited ABN 31 082 991 786

Level 20, No.1 Martin Place Sydney NSW 2000 GPO Box 2704 Sydney NSW 2001 T +61 2 8651 9000 F +61 2 9221 4655 www.charterhall.com.au

For further enquiries, please contact

David Harrison

Managing Director and Group CEO Charter Hall +61 2 8651 9142 david.harrison@charterhall.com.au

For investor enquiries, please contact

Philip Cheetham

Head of Listed Investor Relations Charter Hall +61 403 839 155 philip.cheetham@charterhall.com.au

For media enquiries, please contact

Adrian Harrington

Head of Capital and Product Development Charter Hall +61 410 489 072 adrian.harrington@charterhall.com.au

Announcement authorised by the Charter Hall Group Board.

Important information

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. 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 may be differences between forecast and actual results because events and actual circumstances frequently do not occur as forecast and these differences may be material.

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 Charter Hall Group disclaims 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.

All information contained herein is current as at 31 October 2020 unless otherwise stated and these numbers have not been audited. All references to dollars ($) are to Australian dollars, unless otherwise stated.

Charter Hall charMarke t Updateerhall.com.au

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