CHARTER HALL GROUP — Interim / Quarterly Report 2015

Feb 24, 2015

25 February 2015

Charter Hall Group

Half Year Results 6 months to 31 December 2014

Charter Hall Group

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Agenda

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David Harrison Joint Managing Director

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David Southon Joint Managing Director

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Paul Altschwager Chief Financial Officer

• 1 1HY15 Results Summary

• 2 Property Investments

• 3 Property Funds Management

• 4 Financial Result

• 5 Outlook and Guidance

• 6 Additional Information

1

Charter Hall Group | Half Year Results 31 December 2014

1HY15 Results Summary

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Charter Hall Group

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Key achievements

1HY15 Results Summary[1 ]

OEPS growth 10.6% on pcp

DPS growth 10.0% on pcp

Total Securityholder Return of 30%[2]

$2.0bn in transactions $1.4bn of acquisitions $0.6bn of divestments

Australian FUM up 10.4% to $12.7bn

$944m gross equity inflows $741m net equity inflows

1. Figures and statistics on this slide are for 1HY15 being the 6 months to 31 December 2014 with the prior corresponding period (‘pcp’) being the 6 months to 31 December 2013 2. Total securityholder return is based on the 12 months to 31 December 2014. Source: UBS and S&P/ASX

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Charter Hall Group | Half Year Results 31 December 2014

Charter Hall Group

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Solid organic growth in Australian platform 1HY15 Results Summary

• Increase in operating earnings per security (OEPS) to 13.74cps, up 10.6%

• Statutory profit after tax of $39.9m, up from $28.6m

• Operating earnings of $48.4m[1] , up 27.1% on pcp

• Distribution of 12.1cps, up 10.0% on pcp

• Property Investments (PI) operating earnings up 22.8% to $28.4m

• Property Investment yield stable at 7.6%, despite WACR falling by 40bps to 7.17%

• Charter Hall co-invested a further $164m, partially funded by $88m of recycled capital

• Property Funds Management (PFM) operating earnings up 27.4% to $21.3m

• Secured $944m of gross equity flows and $741m of net inflows post investor equity returns

• Australian FUM increased by 10.4% to $12.7bn for the six month period

• Property Funds Management EBITDA margin increased from 36.1% to 39.7%

• Operating Earnings of $48.4m includes non-cash security based benefit expense of $1.3m (1HY14: $1.8m) which is not allocated to the PFM or PI segments

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Charter Hall Group | Half Year Results 31 December 2014

Charter Hall Group

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Total securityholder returns

1HY15 Results Summary

• Total securityholder return for 1 year to 31 Dec 2014: 30.3%

• Best performance in A-REIT 200 index over 3 years: 39.5% pa[1 ]

Total performance over 1, 3 and 5 years (% pa) to 31 Dec 2014[1 ]

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45%
39.5%
40%
35%
30.3%
30%
27.0%
25%
21.9%
20% 18.2%
15% 12.2%
9.2% 8.6% 8.9%
10%
5%
0%
1 year 3 years p.a. 5 years p.a.
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Mercer/IPD Wholesale Pooled Property Funds Index ASX 200 Property Accumulation Index

Charter Hall Group securityholders

1. Source: IPD, UBS and S&P/ASX

2. Operating earnings per security prior to and including 1HY13 restated to include non-cash security based benefits expense

Distribution per security growth

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14.0
12.10
12.0 11.00
9.80
10.0 9.10
8.00
8.0
6.15
6.0
4.0
2.0
0.0
1HY10 1HY11 1HY12 1HY13 1HY14 1HY15
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Operating earnings per security growth[2 ]

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16.0
13.74
14.0
12.42
11.29
12.0 10.80
9.83
10.0
7.72
8.0
6.0
4.0
2.0
0.0
1HY10 1HY11 1HY12 1HY13 1HY14 1HY15
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Charter Hall Group | Half Year Results 31 December 2014

Charter Hall Group

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Consistent delivery on strategy

1HY15 Results Summary

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ACCESS DEPLOY MANAGE INVEST
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3 Years 6 Months
	Access to multiple equity sources	Creating value through attractive investment opportunities		Property funds management, asset management, leasing & development services	Investing alongside our capital partners
	$944m gross equity raised				$795m of property investments with 7.17% WACR2 and 8.8% ~~discount rate~~
		$2bn transactions $1.4bn acquisitions $0.6bn divestments		~~$12.7bn FUM~~ 270 properties 2,264 tenants 284 leasing deals
	$4.4bn gross equity raised
					WALE1 increased by 3yrs to 9.5yrs
		$8.3bn transactions $5.8bn acquisitions $2.5bn divestments		$4.3bn FUM growth 113 additional properties

1. WALE is the Weighted Average Lease Expiry for the Property Investments portfolio which is measured by all tenants remaining leases in years, weighted by each tenant’s gross income as a proportion of the total potential gross income for the portfolio

2. WACR is Weighted Average Cap Rate for the Charter Hall Group Property Investments portfolio and is weighted by individual co-investment value as a proportion of total property investments

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Charter Hall Group | Half Year Results 31 December 2014

Charter Hall Group

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Operating earnings composition

1HY15 Results Summary

Operating earnings of $48.4m[1] , up 27.1% pcp from $38.1m

• 57% of operating earnings from property investments

• Property investments growth of 22.8% pcp

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800 Property Investment Earnings Drivers 8%
700 7%
600 6%
500 5%
400 4%
300 3%
200 2%
Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14
Property Investment Co-investment Yield
(LHS) (RHS)
14 45%
Property Funds Management Earnings Drivers
40%
12
35%
10
30%
8 25%
6 20%
15%
4
10%
2
5%
0 0%
Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14
Australian FUM (LHS) PFM EBITDA margin (RHS)
Co-investment Yield (%)
Property Investment portfolio ($m)
Domestic FUM ($bn)
PFM EBITDA Margin (%)
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• Property funds management growth of 27.4% pcp

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$30
28.4
1HY14
$25
1HY15
23.2
21.3
$20
16.7
$15
$10
Property Investments Property Funds Management
57% of Operating Earnings 43% of Operating Earnings
Operating Earnings ($m)
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1. Operating Earnings of $48.4m includes non-cash security based benefit expense of $1.3m (1HY14: $1.8m) which is not allocated to any of the segments described above. Graphs are shown based on Operating Earnings pre the security based expense

7

Charter Hall Group | Half Year Results 31 December 2014

Property Investments

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Charter Hall Group

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PI earnings grow by 22.8% to $28.4m

Property Investments

• Charter Hall Group’s balance sheet investments increased by $75m to $795m

• Portfolio WALE[1] increased by 1.9 years to 9.5 years during 1HY15, following investment into LWIP

• Occupancy increased 0.8% to 97.6%

• WACR reduced 40bps to 7.17%[2] , with 29bps on a like for like basis

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% of CHC Property Investment Portfolio
By Fund Type
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% of CHC Property Investment Portfolio By Fund

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Retail Equity,
$24.8m (3%)
Listed Fund,
$138.6m
(17%)
Wholesale
Equity,
$632.1m
(80%)
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Other, 3.1%
CHOT,
LWIP, 17.2% 20.7%
CLP, 11.1%
CPOF,
14.5%
CPIF, 9.2% RP2, 2.5%
LWHP, 4.4% CQR, 17.4%
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1. Portfolio WALE calculated as the sum of each fund’s WALE by gross income multiplied by its % of the Property portfolio 2. Refer to slide 28 for NTA and Cap Rate bridge

9

Charter Hall Group | Half Year Results 31 December 2014

Charter Hall Group

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Enhanced portfolio quality

Property Investments

In line with our strategy, Charter Hall Group has continued to focus on reweighting its Property Investments towards a more diversified portfolio

• Property Investment portfolio has increased its exposure to long WALE industrial, hospitality and retail assets

• Diversification of the portfolio has been further enhanced with an investment in LWIP

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Property Investments by Sector Property Investments by Sector
30 June 2014 31 December 2014
Hospitality
14%
Industrial
25%
Office Industrial Office
42% 22% 37%
Retail
Retail
33%
27%
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10

Charter Hall Group | Half Year Results 31 December 2014

Charter Hall Group

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Portfolio WALE and lease expiry Property Investments

• CHC Portfolio composition and upcoming lease expiries actively managed

• −Property Investment portfolio WALE increased from 7.6 years to 9.5 years during 1HY15

• −54% of leases expiring in 8 years or more

Fund WALE and Portfolio WALE[1 ]

Lease Expiry Profile by Sector

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Retail Office Industrial Hospitality
LWIP 19.8
60.0%
CLP 12.4
50.0%
LWHP 10.0
40.0%
CPIF 7.8
30.0%
CQR 7.2
20.0%
CPOF 6.9
10.0%
CHOT 5.8
0.0%
RP2 3.3
CHPT 9.5
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1. Portfolio WALE calculated as the sum of each fund’s WALE by gross income multiplied by its % of the Property portfolio

11

Charter Hall Group | Half Year Results 31 December 2014

Charter Hall Group

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Top tenants by gross income Property Investments

• Property Investments portfolio has high occupancy at 97.6%

• Focus on quality of tenant covenants

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Occupancy by Gross Income [2] Top 10 Tenants by Gross Income [1 ]
LWIP 100.0% Woolworths 22.9%
Wesfarmers 11.7%
CPIF 100.0%
Government 5.8%
LWHP 99.4%
Telstra 3.8%
CLP 99.2%
Macquarie Group 3.5%
CQR 98.5%
Metcash 1.6%
RP2 98.2%
Westpac 1.6%
CHOT 95.8%
Wilson Parking 0.9%
CPOF 94.7%
Aurizon 0.8%
CHPT 97.6%
Allianz 0.8%
90.0% 92.0% 94.0% 96.0% 98.0% 100.0%
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1. Top tenant classification: Top tenant classifications refer to companies and their subsidiaries or related companies. Government tenant classification refers to all Government and Government related tenants 2. Portfolio occupancy calculated as the sum of each fund’s occupancy by gross income multiplied by its % of the Property portfolio

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12

Charter Hall Group | Half Year Results 31 December 2014

Property Funds Management

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Charter Hall Group

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Well diversified funds management portfolio

Property Funds Management

		Portfolio Size	No. of	No. of	Gross income	WALE	Occupancy	Average cap rate
		($bn)	properties	tenants	($m)	(years)	(%)	(%)
Dec	14	12.7	270	2,264	1,081	8.1	97.5%	7.30%
Jun	14	11.5	209	2,289	1,000	7.3	96.8%	7.68%

Diversification by equity source

Asset type diversification[1]

WALE by sector

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Retail 19.8
Equity Listed Hospitality
$1.7bn Fund 4%
(13%) $2.1bn
(17%)
Industrial Office
19% 51%
10.2
7.7
6.8
Wholesale Retail
Equity 26% Office Retail Industrial Hospitality
$8.9bn
(70%)
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1. LWIP is allocated between the Hospitality sector (82%) and Retail sector (18%)

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Charter Hall Group | Half Year Results 31 December 2014

Charter Hall Group

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Office sector activity

Property Funds Management

6 months to 31 December 2014

• $6.5bn in Office funds under management with $220m of acquisitions and $462m of divestments

• $220m acquisition of the University of Western Sydney’s new office campus in Parramatta's CBD, Sydney, with a 15 year WALE (50% CPOF and 50% DOF)

• Completed 93 leasing agreements across 179,172sqm increasing office portfolio WALE from 6.2 to 6.8 years

• Office occupancy improved by 0.5% to 95.9% during 1HY15 (4.1% Office portfolio vacancy relative to national office vacancy rate of 10.8%[1] )

• Major leasing renewals including 20 years to Westpac at Kogarah (CPOF), 10 years to government at Cannington (PFA) and 13,000sqm renewal to Macquarie at No.1 Martin Place, Sydney (CHOT)

• Major new leasing deals include 11,000sqm to APRA and LinkedIn at No.1 Martin Place, Sydney (CHOT), 7,900sqm to Collection House at BoQ HQ, Brisbane fringe

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Artist impression, UWS Parramatta Campus, NSW

	Sector overview	31 Dec 2014	30 Jun 2014	Change
	FUM	$6.5bn	$6.5bn	0
	No. of properties	47	55	(8)
	Gross income	$569m	$586m	($17m)
	Occupancy	95.9%	95.4%	0.5%
	WALE	6.8yrs	6.2yrs	0.6yrs
	Cap Rate	7.25%	7.67%	(0.42%)
	CHC co-investment	$291m	$301m	($10m)

1. Source: PCA all office (National) vacancy rate

15

Charter Hall Group | Half Year Results 31 December 2014

Charter Hall Group

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Retail sector activity

Property Funds Management

6 months to 31 December 2014

• Total Australian retail FUM has increased by 11.9% to $3.3bn during 1HY15 with Charter Hall now managing 108 retail assets throughout Australia

• Total 183 leasing deals over 42,816sqm with occupancy rising 0.1% and remaining strong at 98.6%

• Established and expanded LWHP with additional wholesale equity commitments of $235m. Current GAV of $400m with growth capacity for a further $300m

• RP1 has expanded its portfolio to $518m upon completion of the announced Brickworks Woolworths Marketplace acquisition

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Artist impression, Brickworks Woolworths Marketplace, Adelaide SA

Sector overview	1	31 Dec 2014	30 Jun 2014	Change
FUM		$3.3bn	$2.9bn	$0.4bn
No. of properties		108	96	12
Gross income		$279m	$238m	$41m
Occupancy		98.6%	98.5%	0.1%
WALE		7.7yrs	8.0yrs	(0.3yrs)
Cap Rate		7.23%	7.61%	(0.38%)
CHC co-investment		$218m	$238m	($20m)

1. Australia only

16

Charter Hall Group | Half Year Results 31 December 2014

Charter Hall Group

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Industrial sector activity

Property Funds Management

6 months to 31 December 2014

• Industrial FUM has grown 18% to $2.5bn during 1HY15

• Occupancy close to 100% with 8 leases totaling 78,738sqm during the half. WALE at 10.2 years

• Acquisition of the 6 asset $171.4m Inghams portfolio with assets allocated to CLP, DIF2 and CPIF with WALEs ranging from 20 to 25 years

• CPIF, Australia’s strongest performing wholesale unlisted property fund[1] , completed its first Review Event and achieved a first close capital raising of $329m

• CLP continues to grow, with the acquisition of 4 assets during the half, with GAV at $820m (up from $608m)

• DIF2 now fully invested with Charter Hall Direct launching DIF3 in December 2014

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136 Horrie Miller Drive, Perth WA

Sector overview	31 Dec 2014	30 Jun 2014	Change
FUM	$2.5bn	$2.1bn	$0.4bn
No. of properties	71	58	13
Gross income	$200m	$176m	$24m
Occupancy	99.7%	99.4%	0.3%
WALE	10.2yrs	9.9yrs	0.3yrs
Cap Rate	7.62%	7.88%	(0.26%)
CHC co-investment	$174m	$181m	($7m)

1. Source: 3 year return to 31 December 2014 IPD/Mercer Total Pooled Property Funds Index – multi asset funds

17

Charter Hall Group | Half Year Results 31 December 2014

Charter Hall Group

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Hospitality sector activity

Property Funds Management

6 months to 31 December 2014

• Established the Group’s first investment in the Hospitality sector via a new wholesale partnership, LWIP (Long WALE Investment Partnership) which is a 50/50 JV between Charter Hall and HOSTPLUS

• LWIP acquired a $603m[2] portfolio of 54 high quality hospitality assets, leased to the ALH Group subject to initial lease terms of 20 years plus options with annual CPI rental increases

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Magnums Hotel, Airlie Beach Qld

• The ALH Group is the market leader in the Australian hotel sector and is 75% owned by Woolworths Limited and 25% by Mathieson Group

• A new long WALE asset sector for Charter Hall and its wholesale partners to continue to allocate capital into the future

• LWIP’s FUM, number of properties and CHC co-investment is allocated between Hospitality sectors (82% Hotels) and Retail sector (18% Dan Murphy’s and BWS outlets)

Sector overview	31 Dec 2014
FUM	$0.5bn1
No. of properties	441
Gross income	$34m
Occupancy	100%
WALE	19.8yrs
Cap Rate	6.66%
CHC Investment	$112m1

1. LWIP Cap Rate based on acquisition cost was 6.81% and subsequently revalued at a Cap Rate of 6.66%

Charter Hall Group | Half Year Results 31 December 2014

18

Charter Hall Group

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Australian FUM growth of 10.4% drives earnings

Property Funds Management

• FUM growth driven by activity in the Industrial, Retail and new Hospitality sector

• −Australian property FUM has increased $1.2bn, or 10.4% during 1HY15 to $12.7bn −13.4% CAGR in domestic FUM since June 2010

Total Group FUM

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$bn
13.0 $12.7bn
12.0 $11.5bn
$10.7bn
11.0
$10.2bn $10.3bn
10.0
$8.9bn $9.9bn
9.0
8.0 $8.5bn $8.4bn
7.0
$7.2bn
6.0
5.0
4.0
3.0
2.0
1.0
0.0
Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Dec-14
Australia FUM Offshore FUM
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Australian FUM by equity source

$bn

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$bn
13.0 $12.7bn
12.0 $11.5bn
$1.7bn
11.0
$9.9bn $1.7bn
10.0
$2.1bn
9.0 $8.5bn $8.4bn $1.7bn
$2.0bn
8.0
$7.2bn $1.5bn $1.5bn
7.0 $1.8bn
$1.5bn
6.0 $1.6bn
5.0
4.0 $3.5bn
3.0 $3.2bn
2.0
1.0
$2.5bn $3.6bn $5.4bn $6.5bn $7.8bn $8.9bn
0.0
Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Dec-14
Wholesale Listed Retail
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19

Charter Hall Group | Half Year Results 31 December 2014

Charter Hall Group

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Secured inflows across the funds platform

Property Funds Management

• Diversified equity sources

• Secured $0.9bn in gross equity flows[2] ($0.7bn net) during 1HY15 across all equity sources

	FY13	FY14	1HY15
	($m)	($m)	($m)
Wholesale Pooled Funds	147	651	364
Wholesale Partnerships	599	261	472
Listed Funds	142	260	26
Direct Funds1	288	277	82
Gross equity secured (Australian FUM)	1,176	1,449	944
Net equity secured (Australian FUM)	1,003	987	741

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

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

20

Charter Hall Group | Half Year Results 31 December 2014

Charter Hall Group

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PFM EBITDA growth of 29.3%

Property Funds Management

• PFM EBITDA margin on revenue has increased from 36.1% to 39.7%

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40.0
36.7
1HY14
35.0 1HY15
29.7
30.0
25.0
19.2
20.0
17.8
15.0
10.0
5.0
0.0
Investment Management Property Services (inc CIP)
PFM Revenue ($m)
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$m	1HY15	1HY14	Growth
Revenue	55.9	47.5	17.6%
Net operating expenses	(33.7)	(30.4)	11.0%
Property funds management EBITDA1	22.2	17.1	29.3%
EBITDA margin on revenue	39.7%	36.1%	+358bps

1. PFM Operating Earnings is $21.3m (slide 4). PFM EBITDA is before $0.9m of depreciation expense

21

Charter Hall Group | Half Year Results 31 December 2014

Charter Hall Group

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Development adding to fund performance

Property Funds Management

• Redevelopment opportunities undertaken to enhance both income yield and total returns

• In-house development skills are a core competency

• $1.6bn development pipeline includes major office projects at 570 Bourke Street Melbourne and 333 George Street Sydney, a variety of shopping centre expansions and industrial sites

	Development activity (current projects underway)	On completion value
	Retail	$384m
	Office	$778m
	Industrial	$449m
	Total	$1,611m1

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Artist impression of 333 George Street, Sydney NSW

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Artist impression of 570 Bourke Street, Melbourne VIC

1. $1.2bn included in FUM at 31 December 2014

22

Charter Hall Group | Half Year Results 31 December 2014

Financial Result

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Charter Hall Group

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Profit and Loss by segment

Financial result

• 27.1% growth in Operating Earnings to $48.4m

• PI operating earnings up 22.8% to $28.4m

• increased investments in LWIP, CLP, CQR and LWHP

• – property investment income yield stable at 7.6%

• PFM earnings increased by 27.4% to $21.3m with strong revenue growth in all areas

• Non operating items comprise mainly non-cash management rights amortisation and MTM of derivatives

• OEPS growth of 10.6% to 13.7cps and DPS growth of 10.0% to 12.1cps

	$m	1HY15	1HY14	Change %
	Property investment	28.4	23.2	22.8%
	Property funds management	21.3	16.7	27.4%
	Security based benefits expense	(1.3)	(1.8)	(27.8%)
	Operating earnings	48.4	38.1	27.1%
	Property valuations (net)	4.0	(2.6)
	Amortisation of management rights	(5.1)	(4.2)
	MTM of derivatives	(7.3)	1.3
	Other non-operating items	(0.1)	(4.0)
	Non-operating items	(8.5)	(9.5)
	Profit after tax	39.9	28.6	39.6%
	OEPS (cps)	13.7	12.4	10.6%
	DPS (cps)	12.1	11.0	10.0%
	Payout ratio	88.0%	88.6%

24

Charter Hall Group | Half Year Results 31 December 2014

Charter Hall Group

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Property Investments earnings growth of 22.8% Financial result

• Operating earnings from property investments up 22.8% to $28.4m

• $0.4m earnings growth from investments held for a comparable period

• $7.0m contribution from increased investments in LWIP, CLP, CQR and LWHP

• $1.5m reduction in investment earnings due to the continued wind down of non-core funds

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35.0
+$7.0m ($1.5m) ($0.7m)
30.0
25.0 +$0.4m
$28.4m
20.0 $23.2m
15.0
10.0
5.0
-
1HY14 Change in earnings Increase in property Wind down of non- Increase in interest 1HY15
(Comparable portfolio) investments core funds expense
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25

Charter Hall Group | Half Year Results 31 December 2014

Charter Hall Group

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Property Funds Management earnings up 27.4% Financial result

• PFM operating earnings up 27.4% to $21.3m

• PFM EBITDA margin has expanded by 3.6% to 39.7%

• Investment Management revenue growth of $7m or 23.4% driven by

• $4.9m increase in transactional revenue

• $2.1m increase in fund management fees attributable to the impact of prior year FUM growth now generating recurring fees

• Property Services revenue growth of $1.4m or 8% driven by

• $2.0m contribution from CIP, an increase of $0.7m

• Expenses up $3.3m primarily driven by FUM growth of 10.4% over the past 6 months and continued reinvestment in improved capabilities

	$m	1HY15	1HY14	Change %
	Investment Management	36.7	29.7	23.4%
	Property Services	19.2	17.8	8.0%
	Total PFM revenue	55.9	47.5	17.6%
	Net operating expenses	(33.7)	(30.4)	11.1%
	PFM EBITDA	22.2	17.1	29.3%
	Depreciation	(0.9)	(0.4)	103.5%
	Income tax	0.0	0.0	-
	PFM operating earnings	21.3	16.7	27.4%
	PFM EBITDA margin on revenue	39.7%	36.1%	+3.6%
	Net Operating Expenses / Average FUM	56bps	58bps	(2bps)

26

Charter Hall Group | Half Year Results 31 December 2014

Charter Hall Group

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Balance Sheet Capacity

Financial result

• Strong balance sheet maintained

• $151m investment in LWIP

• Continued capital recycling including $55m of LWHP

• Property Investments represent 94% of net tangible assets

• $100m available liquidity at 31 December 2014

• Deferred tax asset recognised at 31 December 2014 relating to carry forward tax losses

• The PFM platform is expected to be in a tax payable position during FY17

	$m	31 Dec 14	30 June 14
	Cash	12	50
	Property Investments	795	720
	Development investments	45	47
	Deferred tax assets	8	8
	Other tangible assets	50	73
	Intangibles	83	88
	Total assets	993	986
	Borrowings	1	-
	Other liabilities	64	69
	Total liabilities	65	69
	Total equity	928	917
	NTA ($m)	845	829
	NTA per security	2.38	2.38
	Balance sheet gearing (net of cash)	0.0%	0.0%
	Look-through gearing1	37.2%	31.0%
	Available liquidity ($m)	1002	139

1. Calculated by incorporating Charter Hall’s proportional share of total assets (net of cash) and debt (net of cash) of the funds in which it invests

2. Available liquidity at 31 December 2014 excludes $25m of CHC corporate debt facility expiring August 2015

27

Charter Hall Group | Half Year Results 31 December 2014

Charter Hall Group

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NTA per security and Cap Rate bridge

Financial result

Weighted Average Cap Rate[1]

NTA ($ per security)

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

2.50
7.60% (0.12%)
(0.06%)
0.04 (0.04)
7.40% (0.06%)
2.40 (0.05%)
(0.11%)
7.20%
2.42
2.30 2.38
2.38 7.57% 7.28% 7.17%
7.00%
2.20 6.80%
30 June 2014 Net Property 31 Dec 2014 LWIP 31 Dec 2014 30 Jun CHOT CQR CPOF Other 31 Dec LWIP 31 Dec
NTA Revaluation & NTA (Ex LWIP) NTA 2014 Cap Funds 2014 Cap 2014 Cap
Other Rate Rate Rate
(ex LWIP)
$ per security
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• NTA per security uplift of 4cps primarily due to cap rate compression in existing property investment portfolio offset by a net (4cps) reduction relating to LWIP due to the impact of acquisition costs

• WACR has reduced by 40 basis points

• Existing Property Investments cap rate compression of 29 basis points

• 20 year WALE LWIP investment then reduces the WACR by a further 11 basis points

• WACR is Weighted Average Cap Rate for the Charter Hall Group Property Investments portfolio and is weighted by individual co-investment value as a proportion of total property investments Charter Hall Group | Half Year Results 31 December 2014

28

Charter Hall Group

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CHC Cashflow

Financial result

• 1HY15 distribution covered by operating cashflow

• DRP participation of 44.6% will retain approximately $19m

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

60.0 Operating Earnings to Operating Cashflow
($1.7m)
50.0 ($3.0m)
($2.3m) $1.3m $1.1m
$48.4m
40.0 $43.7m $43.0m
30.0
20.0
10.0
-
Operating Change in Change in Earnings vs Security Depreciation Operating Distribution
earnings receivables payables distribution based cashflow paid/payable
received benefits
expense
----- End of picture text -----

Property Investment Movement

• $151m investment in new LWIP fund

• $10m sell down of Coles CDC (DIF3)

• $55m net divestment in LWHP

• The net movement in Property Investment in 1HY15 was $75m

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

1000
900 $151m ($55m)
800 ($15m) ($10m) $4m
700
600
$795m
500 $720m
400
300
200
100
0
Jun 14 LWIP LWHP net CHOT capital Coles CDC Other Dec 14
Investment investment divestment return divestment Investment
Value Value
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29

Charter Hall Group | Half Year Results 31 December 2014

Outlook and Guidance

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Charter Hall Group

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FY15 outlook and earnings guidance Outlook and guidance

• The Australian property yield spread to bond yields and the cost of debt remains attractive for domestic and offshore investors

• Charter Hall continues to focus on investing in assets with strong tenant covenants and long leases, delivering sustainable income and capital growth for investors

Our guidance is as follows:

• Absent unexpected events, our FY15 guidance is 7-9% growth on FY14 operating earnings per security

• The distribution payout ratio is expected to be between 85% and 95% of operating earnings per security

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31

Charter Hall Group | Half Year Results 31 December 2014

Additional Information

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Charter Hall Group

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Additional information

Section	Section	Slide
1	Group & Managed Funds Overview	34-36
2	Property Investment Portfolio	37
3	Fund Updates	38-43
4	Financial Information	44-47
5	Capital Management and Funding	48-50
6	Fund Key	51

33

Charter Hall Group | Half Year Results 31 December 2014

Charter Hall Group

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Charter Hall Group

Group overview

Property Funds Management Platform

$12.7bn FUM

• Investment management • Transaction services • Capital management

	FUM	$12.7bn
	No. of properties	270
	Gross income	$1.1bn

• Asset management

• • Property management

• • Development management

• • Technical services

Charter Hall Group Property Investment $795m co-investments

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OFFICE
$291m
(37% of portfolio)
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RETAIL
$218m
(27% of portfolio)
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INDUSTRIAL HOSPITALITY
$174m $112m
(22% of portfolio) (14% of portfolio)
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1. Figures are as at 31 December 2014

34

Charter Hall Group | Half Year Results 31 December 2014

Charter Hall Group

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Charter Hall managed funds

FUM as at 31 December 2014

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

Listed AREIT Wholesale Pooled funds, Partnerships and Mandates Retail investor funds Funds being realised
$2.1bn $8.8bn $1.7bn $0.1bn
($139m co-invested) ($632m co-invested) ($23m co-invested) ($2m equity to be
realised)
CQR [1 ] Partnerships Partnerships Pooled DOF PFA CHUF
CHOF5 [1 ]
$2.1bn $4.3bn $4.3bn $3.2bn $0.5bn $0.2bn $2m $81m
($11m / 4%) ($0.2m / 0%) ($0.7m/ 24%)
($139m / 10%)
CHOT CLP CPOF
$2.2bn $0.8bn $2.2bn DIF1&2 CDC DPF 685 LaTrobe
($164m / 14%) ($88m / 15%) ($115m / 10%) $0.5bn $0.1bn $7m
$10m
($0.8m / 0%) ($10m/ 12%) ($1m / 20%)
LWIP LWHP CPIF
$0.6bn $0.5bn $1.0bn
($137m / 50%) ($35m / 12%) ($73m / 8%) DIF3 CHIF 8
$85m $62m
RP2 Mandates
$0.2bn $1.3bn
Workzone VA
($20m / 20%)
$125m $67m
BSWF [2 ]
$0.6bn
BW Trust
Other $73m
mandates [3 ]
$0.7bn
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1. FUM definition includes on completion value for development assets

2. Brisbane Square Wholesale Fund (BSWF) includes 67% of Bankwest Place and Brisbane Square

3. Includes interest in 275 George St (50%) and Adelaide ATO (50%), (which are both co-owned with CPOF); Riverside Centre, 100 Skyring Road, RP1 and other assets

35

Charter Hall Group | Half Year Results 31 December 2014

Charter Hall Group

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Charter Hall managed funds

As at 31 December 2014

	Total	Sector	Equity Source	No. of	Lettable	Occupancy 2	Weighted	WALE	2,3	Weighted
	property			Properties	area (sqm)		average rent	(in years)		average cap
	assets						review			rate
	($m)
Top Managed Funds
CQR	2,138	Retail	Listed	78	540,018	98.5%	4.1%	7.2		7.4%
CHOT	2,148	Office	Wholesale	15	300,187	95.8%	4.0%	5.8		7.0%
CPOF	2,207	Office	Wholesale	16	332,124	94.7%	3.8%	6.9		7.2%
CPIF	1,014	Industrial	Wholesale	38	693,112	100.0%	3.3%	7.8		7.8%
CLP	820	Industrial	Wholesale	17	629,190	99.2%	3.1%	12.4		7.4%
LWIP	618	Hospitality / Retail	Wholesale	54	151,308	100.0%	2.5%	19.8		6.7%
Total Other Funds				218
Wholesale (RP2, LWHP)	699	Retail	Wholesale	16	221,860	99.1%	3.5%	8.2		6.9%
Retail investor funds (DOF, PFA,DIF,
DIF2, DIF3 CDC, Workzone, BP,	1,664	Office / Industrial / Retail	Retail	38	624,315	98.0%	3.2%	9.1		7.8%
Virgin,CHIF8,DIF3)
3rdparty mandates1	1,302	Office / Retail	Wholesale	17	202,939	97.9%	3.1%	7.6		6.0%
Sub-total / Weighted average	12,609			289	3,695,052	97.5%	3.6%	8.2		7.2%
Assets jointly owned by CHC funds				(22)
Sub-total / Weighted average	12,609			267	3,695,052	97.5%	3.6%	8.2		7.2%
Funds being realised (DPF, CHUF, CHOF5)	90	Office / Retail	Retail / Wholesale	3	10,462	100%	2.6%	4.3		9.3%
Direct Property (685 La Trobe St)	10
Total / Weighted average	12,710			270	3,705,514	97.5%	3.7%	8.1		7.3%

1. Includes interest in 275 George St, BankWest Place and Brisbane Square, co-owned with CPOF; 50% of RP1, co-owned with CQR; Riverside Centre and other assets. No. of properties excludes properties already in CPOF and CQR 2. Occupancy and WALE includes income support

2. Portfolio WALE is weighted by gross income. CQR discloses WALE based on annual base rent

36

Charter Hall Group | Half Year Results 31 December 2014

Charter Hall Group

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CHC Property Investment portfolio As at 31 December 2014

As at 31 December 2014
	Ownership Stake	Charter Hall	Charter Hall	WALE	Market Cap Rate	Discount Rate	Average	Charter Hall
		Investment	Investment				rental reviews	Investment Yield
			Income
	(%)	($m)	($m)	(years)	(%)	(%)	(%)	(%)
Listed Fund		138.6	5.8
Charter Hall Retail REIT (CQR)1	10.5%	138.6	5.8	7.2	7.4%	9.0%	4.1%	8.7%
Wholesale		632.1	21.8
Charter Hall Office Trust (CHOT)	14.3%	164.3	6.1	5.8	7.0%	8.4%	4.0%	7.3%
Long WALE Investment Partnership (LWIP)	50.0%	136.5	2.6	19.8	6.7%	N/A	2.5%	7.8%
Core Plus Office Fund (CPOF)	9.8%	115.3	3.9	6.9	7.2%	8.6%	3.8%	6.7%
Core Logistics Partnership (CLP)	14.8%	88.0	3.0	12.4	7.4%	9.3%	3.1%	7.0%
Core Plus Industrial Fund (CPIF)	8.1%	73.2	3.0	7.8	7.8%	9.6%	3.3%	8.2%
Long WALE Hardware Partnership (LWHP)	12.1%	35.2	2.4	10.0	6.9%	8.9%	3.1%	7.4%
Retail Partnership No. 2 (RP2)	20.0%	19.6	0.8	3.3	7.0%	8.8%	4.6%	8.2%
Retail Investor Funds		22.6	1.2
Direct Office Fund (DOF)	3.9%	11.2	0.4	6.5	7.6%	8.8%	3.1%	7.8%
PFA Diversified Property Trust (PFA)	0.1%	0.2	0.0	5.6	9.1%	9.7%	3.0%	9.9%
Direct Industrial Fund (DIF)	0.2%	0.3	0.0	10.8	7.5%	9.4%	3.3%	8.3%
Direct Industrial Fund No. 2 (DIF2)	0.4%	0.5	0.0	13.7	7.6%	9.4%	3.0%	8.2%
Coles RDC Fund (DIF3)	12.0%	10.4	0.8	12.2	7.5%	8.8%	2.8%	7.8%
Funds being realised		2.2	0.1
Diversified Property Fund (DPF)	19.6%	1.5	0.1	4.3	9.3%	10.0%	2.6%	N/A
Charter Hall Umbrella Fund (CHUF)	24.2%	0.7	0.0	4.3	9.3%	10.0%	2.6%	N/A
**Total2 **		795.5	28.9	9.5	7.2%	8.8%	3.6%	7.6%

1. CQR WALE reported based on total WALE. CQR minimum rent reviews is weighted average rent reviews of specialty tenants 2. Weighted average property statistics based on the funds where CHC has an investment

37

Charter Hall Group | Half Year Results 31 December 2014

Charter Hall Group

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Charter Hall Office Trust (CHOT) Property investment portfolio

Key events during 1HY15

• Total of 44,079sqm leases executed and terms agreed on a further 26,254sqm – representing 19% of the portfolio

• Active portfolio capital management to take advantage of market cycle with divestment of 59 Goulburn Street, Sydney, Charter Grove, St Leonards and Moonee Ponds, Victoria all achieving a premium to book value

• Debt facility repricing producing a 55 bps reduction in average margin and increased weighted debt maturity from 2.4 to 3.9 years

• Top tenants include the Australian government, Macquarie, Telstra, Citigroup, Aurizon and Allianz

Portfolio characteristics Key metrics	Portfolio characteristics Key metrics
Gross property assets	$2.15bn
Total debt	$0.96bn
Gearing (look-through)	43.6%
Number of assets	15
Occupancy	95.8%
Weighted average lease expiry	5.8 years
CBD assets	87%
Prime grade assets	96%
Weighted average cap rate	7.0%
Weighted average rent review (next 12 months)	4.0%
Charter Hall co-investment	$164m / 14.3%

Geographic allocation (by GAV)

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

WA ACT
3% 1%
QLD
10%
VIC
26%
NSW
60%
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CHOT Debt Expiry Profile (by facility limit)

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

$800m
$700m
$600m
$500m
$400 $400 $400m
$400m
$300m
$200m
$100m
$0m
FY15 FY16 FY17 FY18 FY19 FY20+
Facility Limit ($A'm)
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38

Charter Hall Group | Half Year Results 31 December 2014

Charter Hall Group

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Charter Hall Retail REIT (CQR)

Property investment portfolio

Key events during 1HY15

• Acquired two properties for $96.7 million at average initial yield of 7.2%

• Commenced or completed $69 million of redevelopment projects

• Occupancy remained stable at 98.5%

• Offshore disposals complete following the sale of German and New Zealand assets

• An incremental $250 million tranche of the existing bank debt facility has been credit approved to refinance the CMBS upon expiry in September 2015[1]

Portfolio characteristics **Key metrics1 **	Portfolio characteristics **Key metrics1 **
Grosspropertyassets	$2.1bn
Total look-through debt(net of cash)	$752m
Look-throughgearing	34.9%
Total number of assets	78
Occupancy (weighted on GLA)	98.5%
Anchor WALE	11.0years
Weighted average caprate	7.4%
SamepropertyNOIgrowth	3.4%
Weighted averaged rent review (next 12 months)	4.1%
Charter Hall co-investment	$139m / 10.5%

Geographic allocation

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

SA
6%
VIC
11%
NSW
40%
WA
16%
QLD ACT
22% TAS 4%
1%
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CQR debt expiry profile[1 ]

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

$500m
$444
$450m
$400m
$350m
$300m
$250
$250m
$200m
$150m
$85
$100m
$50m
$0m
FY15 FY16 FY17 FY18 FY19 FY20+
Facility Limit ($A'm)
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1. Credit approved, subject to documentation

39

Charter Hall Group | Half Year Results 31 December 2014

Charter Hall Group

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Core Plus Office Fund (CPOF) Property investment portfolio

Key events during 1HY15

• CPOF acquired a 50% interest of 169 Macquarie Street, Parramatta, fully leased to the University of Western Sydney (UWS) for 15 years structured on a double net lease

• The Bank of Queensland relocated into 100 Skyring Terrace following practical completion in August approximately 3 months ahead of programme.

• Assets currently under construction include 333 George Street, Sydney and 570 Bourke Street, Melbourne

• The Fund settled on the sale of a non-core asset at 51 Pirie Street, Adelaide in January 2015 for $13m

Portfolio characteristics Key metrics	Portfolio characteristics Key metrics
Grosspropertyassets1	$2.2bn
Total debt	$884m
Gearing (look-through)	40.6%
Number of assets	16
Occupancy2	94.7%
Weighted average lease expiry2	6.9years
CBD assets	94%
Agrade assets	95%
Weighted average caprate	7.2%
Weighted average rent review (next 12 months)	3.8%
Charter Hall co-investment	$115m / 9.8%

Geographic allocation (by GAV)

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

VIC
20% NSW
28%
WA SA
19% 6%
QLD
27%
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Debt facility expiry profile (by facility limit)

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

$800m
$700m
$600m $550
$489
$500m
$400m
$300m
$200m $150
$100m
$38
$0m
FY15 FY16 FY17 FY18 FY19 FY20+
Facility Limit ($A'm)
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1. Represents Dec-14 book values including the completion value of UWS Parramatta 2. Core assets, including income support

40

Charter Hall Group | Half Year Results 31 December 2014

Charter Hall Group

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Core Logistics Partnership (CLP) Property investment portfolio

Key events during the 1HY15

• 4 assets of 17 in portfolio acquired during 1H15 (24% GAV)

• The CLP portfolio retained high occupancy over the period at 99.2% with a WALE of 12.4 years and fixed annual rent reviews of 3.1% pa

• Portfolio GAV expected circa $860m once all current pre-leased forward funded developments are completed

• Assets currently under construction include a pre-lease to Cascade at Darra, the construction of an office building on the Peters Ice Cream site at Mulgrave, Melbourne and a new lease to Woolworths in Laverton, Melbourne

Portfolio characteristics Key metrics	Portfolio characteristics Key metrics
Gross property assets1	$820m
Total debt	$205m
Gearing (look-through)	24.6%
Number of assets	17
Occupancy	99.2%
Weighted average lease expiry	12.4 years
Weighted average cap rate	7.4 %
Weighted average rent review (next 12 months)	3.1%
Charter Hall co-investment	$88m / 14.8%

• Top Tenants include Inghams, Peters Ice Cream, Metcash and Woolworths

Geographic allocation (by GAV)

Debt expiry profile (by facility limit)

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

SA
NSW
TAS 7%
12%
5%
WA
13%
QLD
14%
VIC
49%
----- End of picture text -----

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

$300m
$250
$250m
$200m
$150m
$100m
$50m
0.0
$0m
FY15 FY16 FY17 FY18 FY19 FY20+
Facility Limit ($A'm)
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1. Assumes PC of Woolworths Laverton due April 2015

41

Charter Hall Group | Half Year Results 31 December 2014

Charter Hall Group

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Core Plus Industrial Fund (CPIF)

Property investment portfolio

Key events during the 1HY15

• CPIF ranked as Australia’s highest performing unlisted wholesale property fund (all sectors) over the 3 years to 31 December 2014 according to IPD data

• During the half the Fund reached $1 billion in gross asset value and is now diversified across 38 assets with 100% occupancy and a 7.8 year WALE

• Top tenants include Wesfarmers, Volkswagen, Fosters, Metcash, Toll Group and Woolworths

• CPIF owns a 37ha land bank spread across multiple sites with capacity to deliver up to 176,000sqm or $225m of investment product

Portfolio characteristics1 Key metrics Grosspropertyassets $1,014m Total debt $44m Gearing (look-through) 2.15% Number of assets 38 Occupancy 100% Weighted average lease expiry 7.8years Weighted average caprate 7.8% Weighted average rent review (next 12 months) 3.3% Charter Hall co-investment $73m / 8.1%	Portfolio characteristics1 Key metrics Grosspropertyassets $1,014m Total debt $44m Gearing (look-through) 2.15% Number of assets 38 Occupancy 100% Weighted average lease expiry 7.8years Weighted average caprate 7.8% Weighted average rent review (next 12 months) 3.3% Charter Hall co-investment $73m / 8.1%
Grosspropertyassets	$1,014m
Total debt	$44m
Gearing (look-through)	2.15%
Number of assets	38
Occupancy	100%
Weighted average lease expiry	7.8years
Weighted average caprate	7.8%
Weighted average rent review (next 12 months)	3.3%
Charter Hall co-investment	$73m / 8.1%

Geographic allocation (by GAV)

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

SA
VIC
3%
12%
NSW
29%
WA TAS
25% 4%
QLD
27%
----- End of picture text -----

Debt facility expiry profile (by facility limit)

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

$800m
$700m
$600m
$500m
$400m
$325m
$300m
$200m
$100m
$24m
$0m
FY15 FY16 FY17 FY18 FY19 FY20+
Facility Limit ($A'm)
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1. Includes look through assets and debt

2. More information on the assets owned by CPIF is shown in the 31 December 2014 Charter Hall Group property portfolio book

42

Charter Hall Group | Half Year Results 31 December 2014

Charter Hall Group

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Long WALE Investment Portfolio (LWIP)

Property investment portfolio

Key events during the 1HY15

• $603m acquisition of 54 ALH leased hotels including 18 Dan Murphy’s

• Portfolio WALE of 20 years at acquisition with CPI annual rental increases

• Interest rate hedges in place for up to 5 years at an average base rate of 3.12%

• Charter Hall carrying value at December 2014 is net of its share of LWIP transaction costs

Portfolio characteristics Key metrics	Portfolio characteristics Key metrics
Grosspropertyassets1	$618m
Total debt	$340m
Gearing (look-through)	54.1%
Number of assets	54
Occupancy	100%
Weighted average lease expiry 2	19.8years
Weighted average caprate	6.7%
Weighted average rent review (next 12 months)	CPI
Charter Hall co-investment	$137m / 50%

Geographic Allocation (by GAV)

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

SA NSW
TAS 7% 3%
3%
WA
11%
VIC
39%
QLD
37%
----- End of picture text -----

Debt facility expiry profile (by facility limit)

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

$200m
$170 $170
$150m
$100m
$50m
$0m
FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22+
Facility Limit ($A'm)
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1. 1 Independent acquisition valuation 2. 2 As at 31 December 2014

43

Charter Hall Group | Half Year Results 31 December 2014

Charter Hall Group

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Key financial metrics

Financial performance

GROUP 1HY15 1HY14 Change	GROUP 1HY15 1HY14 Change	GROUP 1HY15 1HY14 Change	GROUP 1HY15 1HY14 Change
Statutory profit after tax $39.9m $28.6m 39.6%
Operating earnings1 $48.4m $38.1m 27.1%
Operating earnings per security (OEPS)1 13.74cps 12.42cps 10.6%
Distribution per security (DPS) 12.1cps 11.0cps 10.0%
Return on Equity2(NTA basis) 11.5% 11.6% (0.1%)
BALANCE SHEET	At 31 Dec 2014	At 30 Jun 2014	Change
Funds under management – Australia $12.7bn $11.5bn 10.4%
Total Group assets $993m $986m 0.7%
Net tangible assets $845m $829m 1.9%
NTA per security $2.38 $2.38 0.0%
Balance sheet gearing3 0.0% 0.0% 0.0%
Look through gearing 37.2% 31.0% 6.2%

1. Operating earnings includes security based benefits expense

2. Return on equity calculated as operating earnings divided by opening NTA plus contributed equity during the year 3. Debt net of cash / Gross assets less cash

44

Charter Hall Group | Half Year Results 31 December 2014

Charter Hall Group

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Detailed operating earnings Financial performance

	1HY15	1HY14	Variance	%
	($m)	($m)	($m)
Property Funds Investment
Property Funds Investment Income	28.9	22.9	6.0	26.2%
Net Interest Income / (Expense)	(0.4)	0.4	(0.7)	(200.0%)
Operating Costs	(0.1)	(0.1)	0.0	0.0%
Property Funds Investment	28.4	23.2	5.2	22.8%
Property Funds Management
Funds Management Income	55.9	47.5	8.4	17.6%
Net Operating Expenses	(33.7)	(30.4)	(3.3)	11.0%
Depreciation	(0.9)	(0.4)	(0.5)	103.5%
Property Funds Management	21.3	16.7	4.6	27.4%
Non-cash security based benefits expense	(1.3)	(1.8)	(0.5)	(27.8%)
Total Operating Earnings	48.4	38.1	10.3	27.1%

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Charter Hall Group | Half Year Results 31 December 2014

Charter Hall Group

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Property funds management operating earnings Financial performance

	1HY15	1HY14	Variance	%
	($000s)	($000s)	($000s)
Revenue
Fund management fees	24,068	22,015	2,053	9.3%
Transaction and performance fees	12,622	7,725	4,897	63.4%
Investment Management	36,690	29,740	6,950	23.4%
Property management fees	7,498	7,036	462	6.6%
Leasing fees	4,678	4,790	(112)	(2.3%)
Facilities and project management fees	1,139	992	147	14.9%
Development management fees	3,860	3,631	229	6.3%
CIP	2,000	1,300	700	53.8%
Property Services	19,175	17,749	1,426	8.0%
Total funds management revenue	55,865	47,489	8,376	17.6%
Net Operating Expenses
Net employee costs	(26,637)	(23,932)	(2,705 )	11.3%
Non-employee costs	(7,068)	(6,419)	(649)	10.1%
Net Operating Expenses	(33,705)	(30,351)	(3,354)	11.1%
Depreciation	(883)	(434)	(449)	103.5%
Operating Earnings: Property Funds Management	21,277	16,704	4,575	27.4%

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Charter Hall Group | Half Year Results 31 December 2014

Charter Hall Group

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Reconciliation of operating earnings to statutory profit after tax Financial performance

	1HY15	1HY14
	$000s	$000s
Operating Earnings	48,441	38,123
Net fair value (loss) / gain on financial derivatives1	(7,348)	1,270
Net fair value adjustment on investments and property1	3,955	(2,096)
Amortisation of management rights	(5,059)	(4,230)
Transfer from reserves of cumulative FX losses on disposal of foreign investments1	(810)	(494)
Income tax benefit / (expense)	372	(1,985)
Other1	369	(1,989)
Statutory profit after tax attributable to stapled securityholders	39,920	28,599

1. Included non-operating items equity accounted investments on a look-through basis

47

Charter Hall Group | Half Year Results 31 December 2014

Charter Hall Group

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PFM platform debt management

Capital management and funding

• Substantial funding capacity available across the funds platform

• $6.0bn of debt facilities across 24 funds and the Group

• $1.5bn available undrawn debt plus $0.2bn of cash

• $0.8bn of new debt facilities and $2.6bn of refinanced debt in FY15 YTD

• Weighted average debt maturity¹ of 3.3 years, down from 3.6 years

Key Debt Metrics

	Key Debt Metrics
	**Managed Funds Platform **	Dec 14	Jun 14
	Group Facility Limit ($m)	6,038	5,485
	Group Undrawn Debt ($m)	1,517	1,325
	Total Group Cash ($m)	216	195
	Look Through Gearing (%)	37%	31%
	Look Through Weighted Average Debt Maturity (yrs)(1)	3.3	3.6
	Look Through Weighted Average Cost of Debt(2)	5.03%	5.10%
	Look Through Interest Rate Hedging (%)	73%	66%

Debt Facility by Sector¹

• WACD² reduced by 7 basis points to 5.0%

• Increased interest rate hedging to 71%, up from 66% across the funds platform

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

45.8%
3,500 Undrawn
Drawn
3,000
2,500
2,000
1,500 38.1%
23.9%
1,000
500 55.9%
37.2%
0
Corporate Office Retail Industrial Hospitality
Debt Facility ($m)
----- End of picture text -----

1. Debt duration is based on facility limits

2. % relates to look through gearing

3. 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

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Charter Hall Group | Half Year Results 31 December 2014

Charter Hall Group

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Debt maturity profile Capital management and funding

• Weighted average maturity at 31 December 2014 is 3.3 years down from 3.6 years at 30 June 2014

• Look through weighted average maturity at 31 December 2014 is 3.2 years

Group

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

2,500
2,036
2,000
1,500
1,221
1,184 1,148
1,000
500 405
43
-
FY15 FY16 FY17 FY18 FY19 FY20+
Debt Facilities ($m)
----- End of picture text -----

CHC Look Through

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

300
265
250
204
200
150
202
100
81
63
50
0
-
FY15 FY16 FY17 FY18 FY19 FY20+
Debt Facilities ($m)
----- End of picture text -----

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Charter Hall Group | Half Year Results 31 December 2014

Charter Hall Group

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CHC look through hedge maturity profile Capital management and funding

CHC Look Through Hedge Maturity Profile

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

600 3.70%
3.60%
500
76%
73% 3.50%
70%
400
63%
55% 3.40%
300
3.30%
200
3.20%
23%
100
3.10%
0%
- 3.00%
Current FY15 FY16 FY17 FY18 FY19 FY20
Hedge Profile¹ Current Drawn Debt² % Hedged Hedge rate³
Hedge Notional ($m)
Weighted Average Hedge Rate (%)
----- End of picture text -----

• The hedge portfolio has a duration of 3.2 years[1]

• The passing weighted average hedge rate is 3.3%[1]

• The passing weighted average cost of debt is 5.0%[1]

1. Interest rate hedging as at 31 December 2014 on a look through basis

2. Current Drawn Debt as at 31 December 2014 and is projected on a straight line basis for illustrative purposes only

3. Hedge Rate is the look through weighted average rate as at 31 December 2014.

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Charter Hall Group | Half Year Results 31 December 2014

Charter Hall Group

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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)	Core Plus Industrial Fund
CPOF (Pooled)	Core Plus Office Fund
LWHP	Long WALE Hardware Partnership
LWIP	Long WALE Investment Partnership
RP1	Retail Partnership No.1
RP2	Retail Partnership No.2 – BateauBay Square

Funds being realised
CHOF5	Charter Hall Opportunity Fund 5
CHUF	Charter Hall Umbrella Fund
DPF	Diversified Property Fund

Retail investor funds	Retail investor 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 (FormerlyCharter Hall Direct PropertyFund)
PFA PFA Diversified Fund
VA Charter Hall Direct VA 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

51

Charter Hall Group | Half Year Results 31 December 2014

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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 31 December 2014 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 Preliminary Financial Report filed with the Australian Securities Exchange on 25 February 2015. 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.

Indications of, and guidance on, future earnings and financial position and performance are “forward-looking 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 31 December 2014 unless otherwise stated, and all references to dollars ($) or A$ are Australian Dollars unless otherwise stated.

Charter Hall Group | Half Year Results 31 December 2014

52

Charter Hall Group

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Further information

David Harrison Joint Managing Director +61 2 8651 9142 david.harrison@charterhall.com.au

David Southon Joint Managing Director +61 2 8651 9143 david.southon@charterhall.com.au

Paul Altschwager Chief Financial Officer

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

Nick Kelly Head of Investor Relations +61 2 8651 9235 nick.kelly@charterhall.com.au

About Charter Hall Group:

Charter Hall Group (ASX:CHC) is one of Australia’s leading fully integrated property groups, with over 23 years’ experience managing high quality property on behalf of institutional, wholesale and retail clients. As at 31 December 2014 Charter Hall had $12.7 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.

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Charter Hall Group half year results 31 December 2014

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