Corporate Overview
With over 32 years’ experience in property investment and funds management, Charter Hall is one of Australia’s leading fully integrated property groups. We use our property expertise to access, deploy, manage, and invest equity & debt across our core real estate sectors – Office, Retail, Industrial & Logistics, Social Infrastructure and the Living Sectors, including Multi Family Housing (MFH).
Operating with prudence, we’ve carefully curated a A$87.4bn-plus diverse portfolio, comprising A$71.9bn property FUM over 1,600 high-quality, long leased properties to more than 4,000 tenants.
Partnership and financial discipline are at the heart of our approach, with our balance sheet capital primarily invested alongside our investors in both funds and partnerships. We currently have more than A$3bn co-invested in our funds and partnerships, underpinning our focus on mutual success.
We take a long-term view, and combine insight and entrepreneurial spirit to unlock hidden value for our investors, customers and communities. Our A$13.9bn pipeline of develop to core projects delivers sustainable, technologically-enabled, future-proofed assets that attract key customers and high-quality, long-term leases, ultimately delivering superior returns for our funds and partnerships.
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.
We invest on behalf of over 100 domestic and global pension funds, insurance companies, sovereign wealth funds, investment managers, three listed A-REITs and more than 35,000 private client investors, offering our customers access to quality property assets.
Charter Hall is listed on the Australian Securities Exchange and trades under the ticker ASX: CHC.
Figures as of 30 June 2023.
Strategic corporate development
Charter Hall Group is focused on increasing our investment reach across Australia through new funds, capital partners, tenant customers, asset acquisitions and our develop to core pipeline across Office, Convenience and Long WALE Retail, Industrial & Logistics and Social Infrastructure and more recently the Living Sector with an initial focus on Multi-Family Housing and Real Estate Debt. Charter Hall remains in a strong financial position, supported by a high-quality team focused on delivering outstanding results for our tenant customers and investors.
Our strategic focus continues to be on investment funds and partnerships that are characterised by long WALEs, high occupancy, and annual rent reviews, that deliver real income growth to our investors. Charter Hall’s development pipeline enables us to add value to existing assets while developing new high quality, ESG enhanced assets (develop to core) within our funds and partnerships.
Figures as of 30 June 2023.
Sector forecasts
Industrial & Logistics
The I&L sector continues to experience significant demand, with supply not yet catching up. One of the primary factors contributing to historically high levels of demand over recent years is the rapid growth of e-commerce.
In addition to the projected growth in online retailing, evolving ESG requirements and the growing prevalence of automated technologies have increased the demand for prime industrial and logistics assets. Additionally, a focus on supply chain resilience and increased cost pressures have shifted supply chain strategies in favour of holding higher inventories.
Meanwhile, the supply response has been insufficient in meeting demand. Geographical constraints, tight planning restrictions and limited connecting infrastructure have limited the availability of zoned land. As a result, the market has been characterised by historically low vacancies and unprecedented demand and resultant compound annual rental growth.
Office
While the broader office market remains challenged, we are witnessing a large divergence in performance across the sector. Modern, high-quality offices have been in high demand, as organisations are finding value in business-critical functions, such as culture, productivity, onboarding, and staff attraction and retention, as well as proximity to hospitality, retail, and transportation amenity. This has been evidenced by strong leasing momentum, positive leasing spreads and solid rental growth over the past six months.
Higher economic rents have reduced supply expectations, with forward supply across the major east coast CBD markets reducing by 30%, whilst older style, obsolescent buildings will be required to convert to alternate uses.
This environment is likely to create a unique supply and demand imbalance for high-quality, well-located assets supporting long-term performance.
Residential/Multifamily
A broad range of secular drivers have intensified the demand for Australia’s multifamily sector.
Australia is ranked among the least affordable residential markets in the world, with extremely low levels of vacancies, a rapidly growing population and a challenging construction environment compounding this issue.
Over the next five years, the collective shortfall across Sydney, Melbourne and Brisbane could be between 150,000 and 200,000 apartments. This will likely place continued downward pressure on vacancy and allow rent growth to be sustained at mid‑high single digit rates.
The imbalance between demand and supply is more pronounced across key target precincts. More than 66% of Australia’s inner suburb precinct rents increased by above 10% over the past year.
Retail
The rapid growth of the population will support aggregate demand. However, the impacts will vary by sub-sector. Overall shopping centre demand will certainly benefit from the increased inbound migration and boost in students and tourists, which are now reaching pre-pandemic levels.
Tightening monetary policy is generating headwinds across larger discretionary shopping centres. However, non-discretionary retail has remained strong and is supported by population growth.
It is likely that convenience retail assets such grocery-anchored shopping centres, pubs and service stations will outperform in this environment. Looking through the lens of past periods of high inflation and slowing growth, the outperformance of non-discretionary consumption was evidenced by retail consumption activity.
Other
Property-related social infrastructure, such as childcare, senior housing (manufactured housing and aged care), student accommodation, government premises and medical/health facilities are increasingly becoming an attractive sector for investors. The underlying demand drivers and attractive yields are set to attract further capital into these assets in the year ahead.
Investment Principles & Strategy
Charter Hall is a fully integrated property investment management platform with expertise across investment management, property and asset management, transaction, leasing and development.
We are a leading owner and manager of long WALE assets that are predominantly leased to corporate and government tenants on long term leases. With carefully curated portfolios, our focus on quality, well-located assets, with strong ESG credentials and secure long-term leases, together with our ability to unlock hidden value, creates a balance between stability, returns and growth.
Charter Hall’s development pipeline enables us to add value to existing assets while producing potential new product within our funds to limit the need for buying assets in a competitive on-market environment.
With a property portfolio of more than 1,600 properties valued at A$71.91bn and leased to over 4,000 tenants, Charter Hall’s market penetration creates opportunities to provide cross-sector solutions to tenant customers.
Our leading market share in transactions along with our dedicated teams in each major market, provides invaluable insight into local property markets. In the past five years, we have undertaken A$42.3bn of gross transactions driven by our investment management, transaction, property services and support teams working collaboratively to curate our portfolios for the benefit of our investors.
Figures as of 30 June 2023.
Performance verification
Charter Hall’s two flagship pooled funds, the Charter Hall Prime Office Fund (CPOF) and Charter Hall Prime Industrial Fund (CPIF) have outperformed the MSCI Mercer Australia Core Wholesale Monthly Index.
As at 30 June 2023, CPOF is the best performing multi-asset unlisted fund in the MSCI Core Office Index over the 1, 2, 3, 5, 7- and 10-year periods and has outperformed the index over all time periods. Over the 3, 5- and 10-year timeframes, CPOF has returned 6.7% pa, 7.7% pa and 10.7% pa respectively.
CPIF is a top performer in the MSCI Core Industrial Index, returning a 16.1%, 14.0% and 13.1% return over the 3,5 and 10 year periods as at 30 June 2023.
Figures as of 30 June 2023.
Compliance statement
This information has been prepared by Charter Hall Funds Management Limited (ACN 082 991 786) (together, with its related bodies corporate, the Charter Hall Group). This information 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. Prospective investors should conduct their own independent review, investigations and analysis of the information contained in or referred to in this publication and the further due diligence information provided. It is not an offer of securities or advice. Any forecast or other forward-looking statement contained in this information 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. Charter Hall Group is not responsible for providing updated information to any prospective investors.
