Corporate Overview

Charter Hall is listed on the Australian Securities Exchange and trades under the ticker code ASX: CHC.

With over 33 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 across our core sectors – Office, Retail, Industrial & Logistics, Social Infrastructure and Living Sector.

Operating with prudence, we’ve carefully curated a A$80.9bn plus diverse portfolio, comprising A$65.5bn of property FUM with over 1,600 high-quality, long-leased properties to more than 4,500 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. Currently we have more than A$2.8bn co-invested in our funds and partnerships, underpinning our focus on mutual success.

We take a long-term view, and combine insight and inventiveness to unlock hidden value for our customer and communities. Our A$12.5bn 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.

Figures as of 30 June 2024 unless otherwise stated.

Strategic corporate development

Charter Hall Group actively seeks out opportunities to strategically grow its business across Australia, with an emphasis on diversification, through new funds, capital partners, tenant customers, asset acquisitions and our develop to core pipeline across Office, Convenience and Long WALE Retail, Industrial & Logistics, Social Infrastructure and Living sectors.

Through diversification of capital sources, Charter Hall has built resilience into its business model, 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 weighted average lease expiries (WALE), 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.

Sector forecasts

INDUSTRIAL & LOGISTICS: I&L continues to benefit from longer-term structural drivers of growth, alongside a strong outlook for consumption and infrastructural development. The demand for modern high-quality assets in premium locations is intensifying, driven by the ongoing evolution of online retailing, the importance of resilient supply chains, higher transportation costs, increased prevalence of automation and heightened ESG requirements.

The sector has the lowest vacancy rate and the strongest rental growth globally. National vacancy rates are at 1.6% and national average rents increased by 16% over the past year. The normalisation in rental growth will likely take longer than market expectations, as a restrictive construction environment continues to limit the required supply response.

OFFICE: The sector has benefited from resilient demand for higher quality offices. Prime occupied stock increased by 69,000 sqm q/q, whilst secondary office demand continued to decline over the quarter. Higher cost of capital and construction challenges have skewed forward supply activity.

Office vacancy has continued to diverge by asset quality and age. Vacancy for assets below the age of 10 years old was significantly lower than offices older than 10 years at market and national levels, highlighting tenants’ preference in high quality and modern assets. National face rental growth was on the trajectory of pre-pandemic levels, led by the CBD markets compared with Metro markets.

Overall quarterly transaction activity lifted, with global investors acquiring major assets across the Sydney CBD. Going forward, transactions are expected to be resurgent as interest rates have reached.

RETAIL: Non-discretionary and convenience retailing growth have continued to be significant, driven by material growth in the population, inbound migration and international students. These formulate strong fundamentals of supermarket and other convenience-focused retailing.

High construction costs and limited development stock have skewed retail construction activities and have reduced forward supply. Rental growth is expected to improve over coming quarters for non-CBD retail centres, underpinned by the expected downward trend in vacancy, high pressure of construction costs and solid retail sales.

Nearly all transactions have been at or above book values. Going forward, the strong fundamentals of rental growth are expected to have a greater influence on valuations.

LIVING: A broad range of secular drivers has intensified the demand for Australia’s multifamily and co-living sector. Australia is ranked among the least affordable residential markets in the world, with extremely low levels of vacancies and a rapidly growing population. Expensive properties in a highinterest rate environment, coupled with cost-of-living increases, have pushed many into the rental market. The National Housing Accord has committed to 1.2m homes over the next five years.

SOCIAL INFRASTRUCTURE: Assets, such as childcare centres, senior housing, student accommodation, government premises and medical/health facilities, are becoming an increasingly attractive sector for investors. Essential by nature, these sectors continue to benefit from strong demand fundamentals.

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. 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 creating new product within our funds (develop to core) to limit the need for buying assets in a competitive on-market environment.

Charter Hall’s market penetration creates opportunities to provide cross-sector solutions to tenant customers. More than 70% of our tenant customers lease more than one tenancy from us.

Our leading market share in transactions, along with our dedicated teams in each major metropolitan market, provides invaluable insight into local property markets. In the past five years, we have undertaken A$41.4bn 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 funds and partnerships.

A key competitive advantage is our unparalleled access to off-market deals, having completed approximately 50% of all transactions off-market over our long history. We also leverage our skills and relationships to partner with major corporate and government entities on sale and leaseback transactions. We have undertaken more than A$11bn in sale and leaseback transactions in the past 10 years, securing our position as the leader in the long WALE triple net lease sector.

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 2024, CPOF is the best performing multi-asset unlisted fund in the MSCI Core Office Index over the five and seven-year periods and has outperformed the index over the three, five, seven and 10-year timeframes.

Over five- and 10-year timeframes, CPOF has returned 7.7% pa and 10.7% pa respectively. By comparison, the MSCI Core Office Index over five- and 10-year timeframes has returned 6.4% pa and 9.8% pa representing 90-170bps outperformance.

CPIF is a top performer in the MSCI Core Industrial Index, returning a 10.3% and 10.8% return over five- and 10-year periods as at 30 June 2024.

Over the past 10 years, the fund generated a return of 10.8% pa, outperforming the overall MSCI/Mercer Core Australia Property Fund Index, which returned 5.7% pa and the MSCI/Mercer Core Industrial Index, which returned 10.7%. Figures as of 30 June 2024

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 forwardlooking 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.