CHARTER HALL GROUP — Investor Presentation 2018

Apr 30, 2018

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1 May 2018

Charter Hall Group Macquarie Australia Conference

Western Sydney University, 1 Parramatta Square, Parramatta NSW

Charter Hall | Macquarie Australia Conference I 1 May 2018

Group Highlights Group maintained $2.9bn of investment growth capacity

Group Returns $121m statutory profit

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Funds Management
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Property Investments

11.9% 13.2% FUM growth Total Property to $22.5bn Investment Return[2] (9 months)

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Balance Sheet
0% balance sheet
gearing [4]
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30.7% OEPS growth $3.0bn in gross 4.3% OEPS $1.6bn Property 26.8% look through transactions growth pcp Investment portfolio gearing[5] (9 months) 2.6% NTA per security 19.5% 6.4% Property 4.5% Property Funds growth[6] Total Platform Return[1] Investment yield Management yield[3] (6 months)

1. Total Platform Return is calculated as growth in net tangible assets (NTA) per security plus distribution per security divided by the weighted average NTA per security for the 12 months to 31 December 2017

2. Total Property Investment (PI) Return is calculated as growth in the PI portfolio value plus distributions received divided by the weighted average PI portfolio value for the 12 months to 31 December 2017

3. Property Funds Management (PFM) yield is calculated as PFM operating earnings per security divided by the weighted average NTA per security for the 12 months to 31 December 2017

4. Balance sheet gearing calculated as debt (net of cash) / gross assets (less cash)

5. Look through gearing calculated as Charter Hall’s look through debt (net of cash) / total assets (net of cash) of the PI Portfolio plus Charter Hall’s balance sheet

6. Net tangible assets per stapled security is calculated as assets less liabilities, net of intangible assets and related deferred tax.

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Charter Hall | Macquarie Australia Conference I 1 May 2018

Operational Highlights

OFFICE

74 Leasing deals executed across 120,000sqm

Major pre-leases to Vanguard SA Government, CBUS, Telstra Super and BHP

INDUSTRIAL

36 Leasing deals executed across 485,000sqm

200,000sqm new pre-leases on existing land holdings

RETAIL

275 Leasing deals executed across 48,000sqm

• 7 leases executed across 18,000sqm to Majors

130 Lonsdale now 55% pre-leased

$1,900m

gross transactions

9 development projects completion value $2.3bn[1]

$2.9bn new and refinanced debt facilities

$319m

gross transactions

24 development projects completion value $1.7bn[1]

$816m new and refinanced debt facilities

$767m gross transactions with increased non-core divestments as we curate portfolios

14 development projects development spend $392m[1]

$518m new and refinanced debt facilities

Figures on this page refer to the 9 months to 31 March, 2018 unless otherwise stated 1. As at 31 December, 2017

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Charter Hall | Macquarie Australia Conference I 1 May 2018

Sustained Growth

FY16 OEPS to FY18 OEPS (guidance) reflects growth of 10.3% per annum

Operating earnings per security growth[1]

Distributions per security growth

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20.4cps
19.6cps
15.0cps
13.7cps
12.4cps
11.3cps
1H FY13 1H FY14 1H FY15 1H FY16 1H FY17 1H FY18
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15.6cps
14.4cps
13.3cps
12.1cps
11.0cps
9.8cps
1H FY13 1H FY14 1H FY15 1H FY16 1H FY17 1H FY18
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1. Operating earnings per security prior to FY14 restated to include security-based benefits expense 2. Compound annual growth rate (CAGR) from 1H FY13 to 1H FY18

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Charter Hall | Macquarie Australia Conference I 1 May 2018

FY18 Transactional Activity (YTD)

• Consistent transaction volume across core sectors

• Average acquisition value of $90m versus average divestment value of $30m

	($m)	Office	Industrial	Long WALE Retail	Shopping Centre Retail	Total
	Acquisitions	1,426	311	293	216	2,245
	Divestments	474	9	38	221	742
	Net transactions	951	302	255	(5)	1,503
	Gross transactions	1,900	319	331	437	2,987

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Charter Hall | Macquarie Australia Conference I 1 May 2018

Equity Flows

Diversified equity sources with $1.1bn gross equity raised in the 9 months to 31 March, 2018:

• Across the Group six open ended pooled unlisted funds continue to raise new equity

• $602m raised in Wholesale Funds and Partnerships with further equity raising underway in CPOF

• $421m raised in Direct Funds with further equity raising underway in open Direct Funds

($m)	FY15	FY16	FY17	YTD FY18
Wholesale Pooled Funds	653	606	776	354
Wholesale Partnerships	598	467	217	248
Listed Funds1	274	76	988	78
Direct Funds2	180	318	355	421
Gross equity raised	1,705	1,467	2,336	1,101
Net equity raised	1,297	1,099	1,689	989

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

1. Listed Funds include equity raised in CHC, CQR and CLW

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

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Charter Hall | Macquarie Australia Conference I 1 May 2018

Group Funds Management Portfolio

			Portfolio	Lettable	No. of	WALE1	Occupancy	WACR2
			Value ($bn)	Area (m sqm)	Properties	(years)	(%)	(%)
31	Mar	18	22.5	5.5	332	7.8	97.5	5.89
30	Jun	17	19.8	5.1	329	7.7	98.0	6.07

Diversification by equity source

Asset type diversification

WALE by sector

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Retail Equity 9.5
$2.9bn
13% Shopping Centre 8.2
Office Retail
$10.6bn $3.7bn
47% 17%
6.5
Long WALE
Retail
Listed Fund $2.3bn
$4.4bn 10%
19% $22.5bn $22.5bn
Wholesale
Equity
$15.2bn
68%
Industrial
$5.8bn
Office Retail Industrial
26%
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1. WALE is the weighted average lease expiry for the Property Funds Management portfolio and is weighted by gross income

2. WACR is the weighted average cap rate for the Property Funds Management portfolio and is weighted by gross asset value

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Charter Hall | Macquarie Australia Conference I 1 May 2018

Funds Under Management Growth

Funds under management movement ($bn)

Funds under management by equity source ($bn)

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$0.5bn $22.5bn
$2.2bn ($0.7bn) $0.6bn
$19.8bn
Jun 2017 Acquisitions Divestments Net Capex Mar 2018
revaluations
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$22.5bn
$19.8bn $2.9bn
$17.5bn $2.8bn $4.4bn
$2.5bn $4.1bn
$13.6bn $2.5bn $15.2bn
$11.5bn $1.9bn
$12.9bn
$12.4bn
$9.9bn $1.7bn $2.2bn
$8.4bn $1.7bn $2.0bn
$9.5bn
$1.5bn
$1.8bn
$7.8bn
$1.6bn
$6.5bn
$5.4bn
Jun-12 Jun-13 Jun-14 Jun-15 Jun-16 Jun-17 Mar-18
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Unlisted Wholesale Listed Unlisted Retail

1. Compound annual growth rate (CAGR) from 30 June 2012 to 31 March 2018

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Charter Hall | Macquarie Australia Conference I 1 May 2018

Property Investment Portfolio Returns

• The Property Investment Portfolios total property return[1] over the five years to 31 December 2017 is 13.6% per annum, outperforming the MSCI/IPD Unlisted Wholesale Property Fund Index (NAV post fees) which returned 10.9% over the same period

• The below chart shows the total property return of each core Property Investment relative to its sector specific MSCI/IPD index

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18.3%
18.2%
13.6%
13.3%
12.8% 12.7%12.8%
11.8% 12.1% 12.3% 11.8% 12.2%
10.8% 10.6% 10.8% 10.5% 10.9%
9.7% 9.7% 9.7%
CHOT CPOF CPIF CLP LWHP LWIPs Wholesale SC 2 CQR CLW CHC
2012 to 2017 2012 to 2017 2012 to 2017 2012 to 2017 2012 to 2017 2014 to 2017 2012 to 2017 2012 to 2017 2016 to 2017 2012 to 2017
Office Office Industrial Industrial Retail Retail Retail Retail Diversified Diversified
Net Return (% p.a.) MSCI/IPD Benchmark (% p.a.)
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1. Total Property Investment (PI) Return is calculated as growth in the PI portfolio value plus distributions received divided by the weighted average PI portfolio value for the 12 months to 31 December 2017 2. Includes CHC’s investments in Wholesale Shopping Centre (SC) Funds RP2, RP6 and CPRF

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Charter Hall | Macquarie Australia Conference I 1 May 2018

Development Activity

Continues to drive asset creation and attract capital

• Development activity is undertaken by funds/partnerships to enhance income yield and total returns

• In-house development skills are a core competency of Charter Hall

• Total pipeline includes 47 office, industrial and retail projects

• Majority of committed projects are de-risked through pre-leases and fixed price building contracts

• Average committed project size of $234m for office, $58m for industrial and $16m[1] for retail

Development activity (completion value $m)	Committed projects	Uncommitted projects2	Total Pipeline3
Office	1,405	941	2,346
Industrial	816	856	1,672
Retail1	131	261	392
Total	2,352	2,058	4,410

1. Reflects development spend only and excludes existing centre value

2. Includes potential end value of uncommitted development projects

3. $1.7bn included in FUM at 31 December 2017

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Charter Hall | Macquarie Australia Conference I 1 May 2018

Major Tenant Customer Relationships

65% repeat tenant customers across 1,450 leases

• Tenant retention rate of 77.5%

• CHC continues to be a major player within the sale and leaseback market with over $3.0bn sale and leaseback transactions over the last 5 years

• CHC continues to see success sourcing off-market opportunities through loyal existing tenant customers

• Management believe there is still opportunity to do more sale and leaseback transactions within new and existing sectors

• Global market volatility likely to continue to assist the sale and leaseback story as corporates continue strategic efforts to ensure balance sheet stability and focus on their core business operations/efficiencies

Examples of CHC’s Sale and Leaseback Relationships

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Charter Hall | Macquarie Australia Conference I 1 May 2018

FY18 Earnings Guidance

We believe the property market landscape will continue to accommodate growth

• Asset growth is expected in submarkets that are underpinned by favourable property fundamentals where there is effective rental growth

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

Our guidance is as follows:

Based on no material change in current market conditions our FY18 guidance for operating earnings per security post-tax is no less than 3% growth on FY17 OEPS of 35.9 cents per security, equivalent to 37.0 cents per security

The distribution payout ratio is expected to normalise within our longer term range, being 85% to 95% of operating earnings per security post-tax

Artist impression of Wesley Place, 130 Lonsdale Street, Melbourne VIC

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Charter Hall | Macquarie Australia Conference I 1 May 2018

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

Sean McMahon Chief Investment Officer & Industrial CEO

Charter Hall Group

T: +61 2 02 8651 9147 sean.mcmahon@charterhall.com.au

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Russell Proutt Chief Financial Officer Charter Hall Group T: +61 2 8651 9493 russell.proutt@charterhall.com.au

Philip Cheetham Head Of Listed Investor Relations

Charter Hall Group

T: +61 2 8651 9214 philip.cheetham@charterhall.com.au

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Charter Hall | Macquarie Australia Conference I 1 May 2018

Disclaimer

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

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

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

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

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

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

All information contained herein is current as at 31 December 2017 unless otherwise stated. All references to dollars ($) are to Australian dollars, unless otherwise stated.

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Sydney Head Office Charter Hall | Le ~~vel 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

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

www.charterhall.com.au