Australian diversified property giant, Charter Hall, released its 1H FY21 results and upgraded earnings guidance this week, with Managing Director and Group CEO, David Harrison, hailing the past six months a success despite the obvious challenges the property market has faced through the COVID-19 pandemic.
The company reported a statutory profit of A$173.2m, which was a considerable drop from A$313.2m the year before. However, over the period funds under management grew by A$5.8bn in the 6-month period to reach A$46.4bn by 31 December 2020.
In the six months, the number of properties in the portfolio rose from 1,104 to 1,395 and net rent rose by A$150m to almost A$2.32bn. Occupancy across the properties held steady at 97.2% dropping only slightly in the half and the WALE grew from 8.6 years to 9.1.
Charter Hall holds a diverse portfolio, with investments in Industrial & Logistics, Retail, Office and Social Infrastructure. Reflecting a tough year for the retail sector, Charter Hall’s Long WALE Retail and Shopping Centre Retail sectors made up only A$126m of the company’s total A$6.6bn development pipeline, while Office and Industrial & Logistics led the pack in this metric with A$4.32bn and A$1.952bn apiece.
The company’s A$2bn property investment portfolio generated a return of 10.9% in the period with management putting the steady performance down to the portfolio’s diversity and 80% weighting to the East Coast.
Commenting on the results, Managing Director and Group CEO, David Harrison made a particular note of the success the company has had attracting new investment inflows and partnerships, on the back of a half where, despite COVID headwinds the company outperformed the benchmark AREIT Index.
Mr Harrison said, “It’s been another successful six-month period for Charter Hall. Notwithstanding the challenges presented by COVID-19, we have been well insulated by our on-going focus on long WALE properties leased to high quality tenants. As a result, we continue to enjoy the support of our investors who remain keen to invest alongside us in Australian commercial real estate. Our Wholesale Partnerships have had a particularly strong six months with new partnerships created with sovereign wealth fund GIC to house the Ampol portfolio, an expansion of our Aldi supermarket logistics partnership with Allianz, PGGM undertaking a new logistics partnership and QuadReal investing in a new development project at North Quay in Brisbane.”
Looking forward towards the remainder of the year the group raised its guidance for post-tax operating earnings per security (OEPS) from 53.0cps to at least 55cps, based on no material change in current market conditions and on the assumption that the COVID-19 operating environment does not deteriorate markedly.