Charter Hall Group
Annual Report 2024
ASX:CHC
Charter Hall Group
(CHC, Charter Hall or the Group) is one of Australia’s
leading fully integrated property investment and funds
management groups.
For more than three decades, we have focused on the
collective ambitions of our customers, driving mutual
success and enduring impact.
Maku wunkun / Towards tomorrow 2022
Tiarna Herczeg
Contents
Performance highlights
4
How we create value
6
Performance through the cycle
8
Chair message
10
Managing Director & Group CEO message
14
Capital sources
18
Industrial & Logistics
20
Net Lease Retail
23
Shopping Centre Retail
24
Office
26
Social Infrastructure
28
Direct
31
Sustainability
32
Leadership
40
Directors’ Report and Financial Report
45
Securityholder analysis
142
Investor information
144
Contact details
145
Corporate directory
146
Cover: Coles, Midwest Logistics Hub, Truganina Vic
Bunurong land
Our 2024 annual
reporting suite
charterhall.com.au/chc
Annual Results Presentation
Sustainability Report
Corporate Governance
Statement
Modern Slavery Statement
Published before 31 December 2023
Acknowledgement
of Country
Charter Hall acknowledges the Traditional
Custodians of the lands on which we work
and gather.
We pay our respects to Elders past and
present and recognise their continued care
and contribution to Country.
Note: Figures and statistics throughout this presentation are for the
12 months to 30 June 2024 unless otherwise stated.
2 Charter Hall Group Annual Report 2024
Contents
Rockdale Plaza NSW
Gweagal and Bidjigal land
Arnott’s, Huntingwood NSW
Darug land
Performance highlights
Our results demonstrate the strength of our underlying business and our ability
to navigate the property cycle with confidence.
Group Returns
Operating earnings
$359m
OEPS
75.8cps
Return on
Contributed Equity2
19.4%
Property Investments
Property Investment
portfolio
$2.8bn
Property Investment
EBITDA growth (pcp)
9.1%
PI & DI EBITDA share
of Group EBITDA
53%
Funds Management
Group Funds Under
Managment (FUM)3
$80.9bn
Gross property
transactions
$4.1bn
Group EBITDA
margin
79.3%
Balance Sheet
Investment Capacity
Net tangible assets
(NTA) per security
$5.49
Balance sheet
gearing
3.0%
Group investment
capacity4
$6.6bn
1. Figures and statistics throughout this presentation are for the 12 months to 30 June 2024 unless otherwise stated.
2. Return on contributed equity is calculated as total operating earnings post-tax per security divided by the opening
contributed equity per security of $3.91 for the 12 months to 30 June 2024.
3. Includes Paradice Investment Management (PIM) Partnership, with $15.4bn of FUM.
4. Investment capacity calculated as cash plus undrawn debt facilities for CHC and the funds management platform.
At 30 June 2024, platform cash was $0.8bn. Excludes committed and unallotted equity.
1
4 Charter Hall Group Annual Report 2024 / Performance highlights
5
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About us
For more than three decades, we have
focused on the collective ambitions of
our customers to drive mutual success
and an enduring impact.
As a property investment and funds management
company, Charter Hall Group (CHC, Charter Hall
or the Group) takes pride in custodianship of our
investors’ capital. We recognise that our responsibility
extends far beyond this. By maintaining long-term
relationships and gaining a deep understanding of the
ambitions of our customers, people and communities,
we co‑create value that makes a lasting impact.
Delivered in partnership
Tenant customers
We use our national reach and
local market expertise to create
inventive solutions for our tenant
customers that deliver sustainable
growth over time. The breadth
and depth of our cross-sector
expertise combined with our
customer-led culture enables
us to problem‑solve holistically
and meet the evolving needs of
our customers.
Investors
We have built a reputation as
trust-worthy custodians of capital,
with a track record of delivering
strong returns over the long-term.
We curate our funds to withstand
the property cycle, with a focus on
quality, well-located assets with
long-term leases to high quality
businesses in resilient industries.
We invest alongside our capital
partners to align our objectives and
create shared value.
Our people
The strength of our business
is our people. We create
safe, equitable and inclusive
environments to support and
energise our high‑performing
talent. To bring out the best in
our people, we focus on creating
new and diversified opportunities
for professional growth, while
actively evolving our ways of
working to ensure they have the
tools and capability to thrive in
all environments.
Community
We enable community-led
solutions through partnership,
funding and places for connection.
We focus on vulnerable youth and
communities impacted by hardship
to ensure we’re helping those
who need it most. Through our
meaningful, long-term partnerships
and Pledge 1% (our commitment
to sharing 1% of profits, places
and our people’s time to do good),
we can amplify and measure
our impact.
Environment
We continue to deliver sustainable
outcomes with long-term impact,
including making meaningful
progress toward our Net Zero
by 2025 target. We work closely
with our customers and supply
chain partners to identify further
opportunities to reduce emissions,
make more sustainable choices,
and ultimately deliver a healthier
future for our industry, people and
the planet.
Driven by our purpose
Creating better futures by driving
value and mutual success.
Differentiated from our peers
Product innovation
We create bespoke
products, designed with
purpose and discipline,
in response to customer
needs and market
insights.
Scale and
diversification
We are fully-integrated,
with a national presence
across our core sectors.
Transaction origination
Our market penetration
across all channels
enables us to capture
first-mover advantage.
A place for talent
Our operating model
and value chain
develop top talent and
provide unmatched
growth potential.
Deep, trusted
relationships
We deeply understand
our customers’
businesses and partner
to create long‑term value.
United by our values
Active partnership
We believe that if everyone
benefits, we benefit.
Inventive spirit
We create with purpose
and discipline.
Genuine insight
We use expertise to unlock
resilient growth.
Powered by drive
We put our passion into action.
275 George Street, Brisbane Qld
Turrbal and Yuggera land
6 Charter Hall Group Annual Report 2024 / About us
7
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Strategy
We remain focused on creating value
and generating superior returns for
our investor customers through our
strategy of access, deploy, manage
and invest.
Access
Accessing equity
from listed,
wholesale and
retail investors.
Invest
Investing alongside
our capital partners.
Deploy
Creating value
through attractive
investment
opportunities.
Manage
Managing funds
and assets, leasing
and development
services.
1. Page refers to Property FUM unless otherwise stated.
1 year1
3 years1
5 years1
Access
Gross equity allotted
$1.6bn
$9.1bn
$19.5bn
Deploy
Acquisitions
$1.7bn
$16.2bn
$31.5bn
Divestments
$2.4bn
$6.8bn
$9.9bn
Net acquisitions
-$0.7bn
$9.4bn
$21.6bn
Gross transactions
$4.1bn
$23.0bn
$41.4bn
Development Capex
$0.5bn
$6.2bn
$9.2bn
Manage
Group funds under
management (FUM)
$80.9bn
↓ $6.5bn
Property
FUM growth
$65.5bn
↓ $6.3bn
$13.2bn
($4.4bn p.a.)
$35.1bn
($7.0bn p.a.)
Invest
Change in Property
Investment (PI) portfolio
-$0.2bn
↓ 6.5%
$0.4bn
↑ 14.5%
$0.9bn
↑ 49.6%
Left: Wesley Place
130 Lonsdale Melbourne Vic
Wurundjeri and Bunurong land
8 Charter Hall Group Annual Report 2024 / Strategy
9
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1. Our Net Zero target applies to Scope 1 and Scope 2 emissions for existing assets that fall under the operational control of responsible entities for which
Charter Hall Limited is the controlling corporation. Where residual Scope 1 emissions are offset, Charter Hall will use high quality nature‑based offsets.
A balanced approach to retaining
capital for future growth, while
also providing a growing stream of
distributions has been a measure
of the Group’s success.
Our balance sheet remains
modestly geared at 3% and with
investment capacity of almost
$700 million, we consider ourselves
well placed to take advantages of
opportunities as they emerge.
Our approach to partnership with
our customers continues to be a
key focus for us. This investment
in customer has continued to
deliver strong results, with all our
sectors exceeding their FY24
customer targets and our overall
Net Promoter Score (NPS) holding
stable at +52. This is a very strong
result given the past 12 months’
challenges, and this success is
attributable to the performance
of our people. Measures of
professionalism, responsiveness,
trust and quality of communication
all scored highly.
It is the responsibility of the Board
and leadership team to ensure that
we foster a dynamic and rewarding
workplace that attracts and
retains top talent.
In order to do that, we’ve
continued to invest in learning and
development opportunities through
rotations, promotions and evolving
roles across our organisational
structure, while also ensuring our
people feel safe, supported and
included in our workplaces.
Our Group engagement results
demonstrated that this focus
is working, with our Group
engagement score, well-being,
and belief that there is opportunity
for development and growth
significantly exceeding the
Australian company norm.
Importantly, our people told us they
feel like they can be themselves
at work, reflecting our culture of
support and inclusivity.
Pleasingly, this was recognised
in this year’s Pride in Diversity
Australian Workplace Equality Index
(AWEI), where we ranked Silver, an
improvement on Bronze last year.
Demonstrable progress
on environmental goals
Sustainability is integrated into
all our business operations and
activities, with our approach
designed to reduce our impact on
the environment while creating
commercial outcomes for the
Group and for our customers.
With a focus on decarbonisation
and climate action, we continued to
deliver measurable progress on our
environmental goals this year.
We remain on track to meet our
commitment to Net Zero carbon in
operations (Scope 1 and Scope 2)
by 20251, and have achieved an
absolute reduction of >70% in
Scope 1 and Scope 2 emissions
since 2017.
Chair message
Despite persistent
challenges impacting the
economy, we navigated
headwinds alongside our
customers, strengthening
our partnerships and
maintaining a highly
engaged workforce,
setting the foundation
for future growth.
Dear Securityholder
This year, the economic
environment across the globe
continued to present challenges,
as interest rates remained at
elevated levels in most countries
and the Reserve Bank of Australia
continuing to suggest a
tightening bias.
As a result, many Australians have
remained under financial pressure,
and businesses across many
industries have been challenged by
the impacts of higher debt costs.
For commercial real estate, this
has had the twin impacts of
dampening earnings as higher
debt costs have eroded returns,
while simultaneously leading to
devaluations in the underlying
property values. Further, while the
ongoing interest rate environment
has remained uncertain, investors
have been reluctant to commit
new capital for investment until
real estate valuations stabilise.
This has been a challenging
backdrop for the Group to navigate
as fund returns, asset valuations,
transactional activity and raising
new equity capital have all
proven difficult.
We’ve also seen these impacts
affect our customers. We’ve been
very focused on our customers,
understanding the challenges
they’re facing and opportunities
they’re pursuing to ensure we are
positioned to partner with them in
creating solutions that drive mutual
success. Ultimately, the strength of
our tenant and investor customer
relationships is one of the keys to
our resilience as a business.
This year, we delivered operating
earnings of $358.7 million, or
75.8 cents per security (cps),
consistent with our guidance of
approximately 75 cps. This was
down 18.7% from the prior
year, reflecting the high level of
performance and transaction
fees that were earned in FY23.
The result should still be seen as a
strong one given the challenging
environment for real estate
and corresponding subdued
transactional activity. Our ability to
deliver these earnings, consistent
with our guidance reflects strong
cost control and discipline across
the platform.
We also paid a distribution per
stapled security of 45.1 cps, up 6%
on the previous year with franking
credits of 13.13 cps attached.
Our FUM was negatively impacted
this year. Group FUM fell from
$87.4 billion to $80.9 billion and
property FUM fell from $71.9 billion
to $65.5 billion. Notwithstanding
this, we continue to hold the
largest sector-diverse commercial
property portfolio in Australia.
FY25 will not be without its
challenges, and we will continue to
manage headwinds. However, by
leveraging our property expertise,
scale, depth of talent, and strong
relationships with our customers,
we will look to capitalise on the
opportunities for growth we
expect to emerge.
In the meantime, we continue
to look after our people, our
customers and our communities
to ensure that we move forward
together, with mutual success at
the heart of everything we do.
Investing in long-term
outperformance
While this report measures
our performance for the year to
30 June 2024, we see long-term
performance as the true test of
success. Over the past 10 years,
we’ve delivered securityholders
11.6% post-tax growth in earnings
per annum, and distribution
growth of 6% per annum from
FY19 to FY24.
Over the same 10-year period,
we’ve also retained cumulative
earnings of $1.2 billion, supporting
the creation and growth of new
funds and partnerships.
Left: Wesley Place
130 Lonsdale
Melbourne Vic
Wurundjeri and
Bunurong land
10 Charter Hall Group Annual Report 2024 / Chair message
11
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We have progressed well with
measurement of our Scope 3
emissions, critical to achieving our
near-term and long-term Scope 3
emissions targets.
In line with these targets, we’ve
increased our installed onsite solar
capacity to 80MW platform‑wide,
actively supporting our tenant
customers in reducing their
emissions and achieving lower
operational costs, particularly in
our Industrial & Logistics assets.
We are proud to maintain
Australia’s largest footprint
of independently green rated
assets, with over 7.1 million sqm
of assets with Green Star
Performance ratings, which has
driven operational performance
and improvements for the
benefit of both our tenant and
investor customers.
We continue to advance the
Sustainable Development Goals
as part of our commitment to the
United Nations Global Compact
and embed its principles in our
strategy and culture.
We remain focused on building
resilience in our assets to support
customers through resource
efficiency, carbon emission
reduction and the integration
of physical and transitional risks
and opportunities of a changing
climate to ensure we deliver
long-term value.
Partnering on issues
that matter
Our social partnerships and
community investment continued
to be focused where we can make
the most difference.
As the first Australian property
company to align with Pledge
1%, we’ve continued to partner
within the community to have an
enduring impact, with $1.4 million
directly invested in two key
areas: unlocking employment
and learning pathways for
vulnerable young Australians;
and delivering long-term support
and capabilities to communities
impacted by hardship. In FY24,
these partnerships drove 222
employment outcomes in the
year for vulnerable Australians.
We have also formalised long‑term
partnerships with the Australian
Red Cross and the Foundation
for Rural and Regional Renewal
(FRRR) – our partners in disaster
relief, recovery and resilience
building. Our support of the
Australian Red Cross will fund
the recruitment, training and
mentorship of an additional
130 Red Cross emergency services
volunteers each year. With FRRR,
we have co-designed and
launched a $250k grant program
to support communities with the
resources to build and rebuild
strong foundations.
We have also reached a record
level of volunteering hours, with
80% of our people volunteering
3,766 hours of time, which we are
extremely proud of.
Serving customers
and securityholders
A core responsibility of the Board
is providing clear governance and
oversight to assist management
in continuing to deliver against the
Group’s strategy and entrench
ethics in all actions. We will
continue to serve you in this way.
Our Board is comprised of a
majority of independent directors,
in line with best practice. This
composition provides us with
the right mix of talent and skills
with which to guide strategy
and provide a strong overall
contribution to the success of
the Group.
I encourage all our securityholders
to review the Directors’ Report on
page 44 to understand more about
the Board.
Looking forward
We will continue to carefully
manage our cost base and
strategically invest and
deploy capital as we progress
through FY25, looking for
growth opportunities as they
present themselves.
We continue to have an
unwavering focus on customer,
characterised by continuous
listening and co‑creating
solutions that deliver long‑term,
sustainable growth, while
leveraging our talented workforce,
best‑in‑class partners and
carefully curated portfolios to drive
continued resilience.
With decades of experience
in navigating property cycles
and driving strategic growth,
we will continue to create value
and generate superior returns
for securityholders, using our
combined expertise to access,
deploy, manage and invest.
On behalf of the Board, I would like
to thank our tenant customers,
investors and securityholders for
your ongoing support. I extend
gratitude to my fellow Directors
and the leadership team for your
dedication, and to all our people
for their efforts, as together we
continue to build a sustainable
business we can be proud of.
David Clarke
Chair
Left from top to bottom:
PIF Haven House
volunteering - tackling
youth homelessness
201 Elizabeth Street
Sydney NSW
Gadigal land
12 Charter Hall Group Annual Report 2024 / Chair message
13
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A strong foundation
for future growth
Throughout the year, we have
continued to actively curate
sustainable and resilient portfolios
that ensure operational health
through all market cycles and
provide a strong foundation upon
which to grow. This focus on
long‑term performance for our
investors, and our co-investment
alongside them, continues to
attract capital to our platform.
FY24 was quieter for deployment
than prior years as investors
slowed activity in the face
of an uncertain interest rate
environment. Despite this, we still
secured $1.6 billion of gross equity,
predominantly from our wholesale
partnerships. Our Platform has a
long-term track record of attracting
equity inflows from multiple
sources, both domestically and
from global investors. These equity
flows helped facilitate $4.1 billion
of gross transactions for the year.
Our Industrial & Logistics
business continues to focus
on modernisation, delivering
$836 million of new facilities
completed throughout FY24.
Pleasingly, we are progressing well
on our first multi-level warehouse
in Sydney, Ascent on Bourke,
with practical completion to
occur during FY25, pre-leased to
customers Schindler and Coles.
We’ve had significant industrial
and logistics leasing success,
leasing over 689,000sqm across
61 transactions, with a weighted
average lease expiry (WALE)
of 11.4 years on all transactions
nationally. We enjoy 99.3%
occupancy across our entire
industrial and logistics portfolio,
which compares to a national
average of 98.1% and our total
portfolio has a 9.3 year WALE.
We remain well-positioned to
capitalise on the accelerating
demand for modern, purpose-built,
highly efficient facilities, managing
one of the largest logistics
platforms nationally.
Our Office development activity
also remains robust. FY24 saw us
deliver a brand new $400 million
Australia Post head office in
Melbourne at 480 Swan Street,
while continuing work on our
$2.8 billion committed pipeline,
predominantly focused on our
iconic Chifley Square South
Tower in Sydney. Chifley South
achieved a pre‑commitment
level of 55% ahead of breaking
ground, with leading Australian
law firm Gilbert + Tobin joining
UBS and Charter Hall Group as
future occupants. Modernisation
of our Office portfolios is targeted
to meet the bifurcation of tenant
demand we have seen play out for
many years. ▶
Managing Director
& Group CEO message
Dear Securityholder
FY24 was a year of
persistent market
challenges, with a
“higher for longer”
interest rate environment
and stubborn inflation
having a lingering impact
on the economy and
property markets.
The result has been elevated
interest rates that has impacted
interest expense for property funds
and put downward pressure on
asset valuations.
Charter Hall continued to navigate
these challenges, remaining
focused on curating our diverse
portfolio, controlling our cost
base, and staying close to
our customers.
Our property funds under
management (FUM) is now
$65.5 billion, a decrease of
9% primarily due to devaluations,
however we have also successfully
divested assets to lower
gearing across various funds
and managed REITs.
Importantly, this continues to be
offset by our ongoing deployment
of capital into our pre-leased
development pipeline, producing
attractive new investment
opportunities for our investor
customers while fulfilling our
tenant customers accommodation
needs for modern, functional and
efficient facilities.
As the impact of higher interest
rates has washed through the
real estate industry, lowering our
FUM and limiting the deployment
of new equity, we’ve been able
to offset some of these affects
through a strong cost discipline.
Our Group EBITDA margin for the
year was 79.3%, up FY19’s 74.4%
margin, driven by tight cost control.
Our focus has been on closely
managing areas within our control
and this saw us deliver earnings of
75.8 cents per security (cps), above
our original guidance of earnings
of approximately 75 cps.
Asset pricing appears to have
stabilised across most sectors
based on a significant uplift in
transaction volumes across
all sectors.
Strong relationships with
our tenant customers
Strong relationships with our
tenant customers continue to
be an essential strategic focus.
We’ve continued to invest in
refining our cross-sector key
account team approach and
upskilling our people, creating
a demonstrable shift in the way
we engage with our tenant
customers, with the view of
becoming more than a property
partner – we’re a business partner.
Our success with our tenants is
reflected in the high level of repeat
business, with 70% of our tenant
customers holding leases in more
than one Charter Hall property.
Importantly, our willingness to
invest in properties that unlock
greater success for our tenants is
pivotal to how we partner, ensuring
that we achieve sustainable
growth alongside our customers.
This often takes the form of
pre-commitments and sale and
leaseback opportunities.
We also regularly ask our tenant
customers for feedback, including
through annual independent
surveys. This year, our overall
Net Promoter Score held strong
at +52 despite a challenging
environment for us and our
customers, demonstrating the
strength of our relationships
throughout the cycle.
Left: Woolworths
Dandenong Distribution
Centre, Vic
Bunurong land
14 Charter Hall Group Annual Report 2024 / Managing Director & Group CEO message
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We continued to also enjoy strong
leasing success in our Office
projects, having leased over
320,000sqm across 237 leasing
transactions. Notably, our Office
portfolio has maintained a strong
96% occupancy versus a national
average of 84%, demonstrating
the strength and depth of our
relationships with our tenant
customers and our ability to
deliver on our tenant customers’
evolving needs.
In Retail, our non-discretionary
convenience retail portfolio
continues to provide resilient
income returns. Our $4 billion
convenience retail shopping centre
portfolio has seen occupancy
improve, strong releasing spreads,
improved footfall and record
sales densities, demonstrating
its resilient and defensive nature.
This has been complemented by
our net-lease convenience retail
platform which now exceeds
$6.5 billion, enjoying strong rental
growth from its CPI-linked annual
rental escalations and capex
efficient nature.
Similarly, the essential service
thematic embedded in our
Social Infrastructure portfolio
and the importance of these
assets to the community and the
economy means such assets have
delivered resilience and liquidity
despite challenging conditions.
The low correlation these assets
have to the broader economic
cycle continues to make this an
attractive area of deployment.
We continued to see opportunities
to grow in this space and further
our position as a market leading
social infrastructure partner.
Our development capex continued
to make a meaningful contribution
to our FUM and portfolio curation
across our core sectors of
Industrial and Logistics, Office,
Retail and Social Infrastructure.
Our $1.3 billion of development
completions for FY24 have added
significant incremental stabilised
income to our portfolios.
Our continued success in this
space is a reflection of the
extensive tenant customer
relationships that we have driving
meaningful pre-commitments,
and our ability to deliver modern
investment-grade properties that
add significant value through
enhancing income yield and total
returns for our investors.
Our property funds management
portfolio is well-diversified,
comprising 1,618 properties with a
lettable area of 11.4 million sqm and
delivering nearly $3.3 billion in net
rental income per annum.
The resilience built into our
platform has been strategic and
achieved over time, through
considered portfolio curation and
diversification. This includes our
triple net leases, which comprise
23% of our portfolio, meaning the
tenant pays all outgoings including
structural repairs and maintenance.
Similarly, we have made a
conscious effort to build portfolios
that are positioned to benefit
from rising inflation, with 22% of
all leases having inflation-linked
annual rent escalations, providing
direct inflation hedging.
Our property funds management
portfolio is well-diversified.
Group WALE remains strong
at 8.1 years and the weighted
average capitalisation rate is 5.5%,
reflecting the low risk profile and
high-quality assets in our funds
and partnerships.
Defensive and diversified
Property Investment portfolio
With $2.8 billion co-invested in our
funds, our Property Investment
portfolio provides a strong
alignment of interest with our
investor customers, while also
ensuring that securityholders
benefit from our property expertise.
These earnings are characterised
by the high quality of our tenants,
the diversity of sectors, and the
lack of concentration risk.
Occupancy remains strong at
97.4%, and the Property Investment
portfolio WALE remains a healthy
7.2 years. Our weighted average
rent review is attractive at 3.4%,
boosted by our exposure to
CPI‑linked leases. The Group’s
Property Investment portfolio is
a very defensive, well diversified,
core investment portfolio.
Our people are our
greatest asset
Our people are what drive our
success, along with the Executives
and Non-Executive Directors that
represent investors on our various
Boards of listed and unlisted funds.
It is the breadth of experience
and unmatched talent within
our sector-diverse business that
enables us to consistently deliver
for our customers.
Our culture has long been one of
our key strengths. I’m proud and
inspired by the way our people
continue to respond dynamically
to the challenges we face.
This culture is reflected in our
employee engagement.
For FY24, our engagement score
held strong at 89% – nine points
above the Australian norm –
with 90% of our people saying
that Charter Hall is a great
place to work.
Diversity and inclusion continues
to be a priority, and this is having
a positive impact on our people.
This year, 95% of our people said
they feel they can be themselves
at work, with an overall well-being
score of 86%, ten points above
the high-performing norm and
17 points above the Australian
norm. We continue to actively seek
talented people from a wide range
of experiences, backgrounds and
perspectives, celebrate diversity
and provide a sense of belonging
for all our people.
Long-term performance
Financially, we continue to be
disciplined and self-funded from a
growth perspective via a consistent
6% per annum distribution growth
policy that has facilitated cash
retention to fund a FY24 payout
ratio of circa 59%.
Our growth in earnings comes
after-tax. On a post-tax basis, we
delivered 11.6% OEPS compound
annual growth rate (CAGR)
annually over the last ten years.
Tax paid earnings also deliver
valuable franking credits for our
securityholders. Grossed-up for
franking credits, securityholders
received distributions worth
58.2 cps for FY24. The quantum
of franking credits delivered by
Charter Hall to securityholders
makes us unique in the Australian
real estate investment trust sector.
Outlook and guidance
Based on no material adverse
change in current market
conditions, FY25 guidance is for
post-tax OEPS of approximately
79 cents. FY25 distribution per
security guidance is for 6%
growth over FY24.
On behalf of the Executive
Committee, thank you to all our
people for your hard work this
year. I would also like to thank the
Group Board for their continued
strategic guidance along with
the Independent Directors of our
Fund Boards.
Our approach to partnership and
focus on customer underpins the
strength of our long-term outlook.
We will continue to deepen
our existing relationships and
establish new ones, driving value
to create an enduring impact for
our customers, our communities,
and our people.
We are proud of what has been
achieved over more than three
decades and continue to look
beyond the horizon, as we set
the foundation for our next
growth phase. Finally, thank you
to all our investors and tenants
for continuing to be part of our
Charter Hall Group community.
David Harrison
Managing Director & Group CEO
Right: Hello Fresh,
Light Horse Logistics
Hub, NSW
Darug land
16 Charter Hall Group Annual Report 2024 / Managing Director & Group CEO message
17
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Capital sources
From the properties we invest in, to the way
we source and deploy capital, diversification
is central to our success. This informs our
portfolio curation strategy and investment
options, which attract a wide range of
investors, including wholesale, institutional
and retail.
Wholesale pooled
and partnerships
FUM
$44.7bn
Occupancy
97.3%
Capitalisation rate
5.3%
Gearing1
35.5%
WALE
7.9yrs
CHC investment
$1.7bn
Listed
$12.0bn
99.3%
5.5%
29.4%
2
9.6yrs
$0.7bn
3
Direct
$8.8bn
98.9%
5.9%
39.4%
4
7.2yrs
$0.3bn
60 King William Street
Adelaide SA
Kaurna land
2. Reflects aggregate balance sheet gearing of
all listed REITs.
3. Held at accounting value not market value.
1. Gearing has been adjusted for any
contracted divestments post June 2024.
4. Direct gearing includes both
Charter Hall and Folkestone Direct
Funds and adjusted for contracted
divestments post June 2024.
18 Charter Hall Group Annual Report 2024 / Capital sources
19
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Industrial &
Logistics
$25.1bn
Total FUM
9.3yrs
WALE
5.3%
Capitalisation
rate
$6.3bn
Development
pipeline
340
Properties
“
With one of the largest national portfolios
and land banks in the sector, this year we’ve
continued to identify opportunities to deepen
our tenant customer relationships.
This includes our multi-billion dollar development pipeline, delivering
new facilities to meet the accelerating demand for modern, purpose-
built and highly efficient warehouses. In Sydney, we progressed our first
multi-level warehouse, Ascent on Bourke, which is set to reach practical
completion later this year. We were also pleased to announce our
partnership with Western Sydney International Airport, delivering the first
stage of its Business Precinct through a 50/50 joint venture.
We continue to work closely with our tenant customers to increase the
productivity, sustainability and supply chain resilience of their operations,
while creating strong returns for our investors. Accelerating digitalisation
of the global economy means Charter Hall is well placed with our large
industrial footprint and landbank in highly sought after data centre
availability zones.”
Richard Stacker
Industrial & Logistics CEO
Light Horse Logistics Hub, NSW
Darug land
21
20 Charter Hall Group Annual Report 2024 / Industrial & Logistics
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Net Lease Retail
$6.7bn
Total FUM
11.6yrs
WALE
5.0%
Capitalisation
rate
746
Properties
Bunnings
Chatswood NSW
Cammeraygal land
“
The strength of our underlying portfolio of
long WALE assets continues to deliver strong,
consistent rental growth thanks to the blend of
CPI-linked and fixed annual rental increases.
Our portfolio is further bolstered by our focus on strong tenant
covenants, active management and portfolio curation, which
has enabled us to navigate the property cycle despite a negative
impact to earnings as a result of the higher-for-longer interest
rate environment.
Importantly, we continue to manage our portfolio with a focus
on long-term performance, and the robustness of our portfolio
continues to provide a strong foundation for future growth.”
Avi Anger
Diversified CEO
23
22 Charter Hall Group Annual Report 2024 / Net Lease Retail
Back to Contents
Shopping Centre
Retail
$4.0bn
Total FUM
4.6yrs
WALE
6.0%
Capitalisation
rate
48
Properties
“
Our long-term and deep relationships with
some of Australia’s best-known brands has
enabled us to become Australia’s leading
owner and manager of convenience retail
property, providing investors with a highly
defensive and resilient income stream,
throughout the property cycle.
This year, we focused on recycling capital out of smaller,
non‑core assets into larger-scale and well-located assets, such
as our acquisition of Eastgate Bondi Junction as well as unlocking
the low site coverage of our properties to create further value
and grow income through our pad site development program.”
Ben Ellis
Retail CEO and Fund Manager, Charter Hall Retail REIT (CQR)
Eastgate, Bondi Junction NSW
Bidjigal and Gadigal land
25
24 Charter Hall Group Annual Report 2024 / Shopping Centre Retail
Back to Contents
Office
$25.1bn
Total FUM
6.3yrs
WALE
5.8%
Capitalisation
rate
$6.2bn
Development
pipeline
88
Properties
“
Our modern portfolio of Office assets continues
to perform well in the face of a challenging
market, thanks to our focus on best-in-class,
amenity-rich and sustainable precincts, in line
with the needs of our customers.
We’ve maintained a strong 96% occupancy versus a national
average of 84%, demonstrating the strength and depth of our
relationships with our tenant customers and our ability to deliver
on their evolving needs.
We continue to closely partner with our customers to understand
their long-term ambitions. This is reflected in our $6.2 billion
Office pipeline, which includes our Chifley South development,
where we achieved a 55% pre-commitment level prior to
construction commencing this year.”
Carmel Hourigan
Office CEO
60 King William Street
Adelaide SA
Kaurna land
27
26 Charter Hall Group Annual Report 2024 / Office
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Social
Infrastructure
$3.9bn
Total FUM
12.6yrs
WALE
5.2%
Capitalisation
rate
398
Properties
“
We provide investors with secure income
and capital growth through exposure to
social infrastructure properties and support
communities with essential services.
Our diversified portfolio has strong covenants
and long WALEs to tenant customers including
government and Goodstart Early Learning.
The essential service thematic embedded in our portfolio and the
roles these assets play in the community and the economy have
delivered resilience for our customers, as well as strong liquidity
of assets for portfolio curation. We continue to see opportunities
to grow in this space and further our position as a market leading
social infrastructure partner.”
Travis Butcher
Fund Manager, Charter Hall Social Infrastructure REIT (CQE)
Only About Children
Camberwell Vic
Wurundjeri land
29
28 Charter Hall Group Annual Report 2024 / Social Infrastructure
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Direct
“
Charter Hall Direct has a strong track record
managing unlisted property funds for more
than 25 years.
The breadth and depth of expertise across the Charter Hall
platform, coupled with our focus on high quality, well-located
assets have enabled us to navigate the property cycle while
continuing to provide our investors with regular distributions
and investment performance over the long-term. Importantly,
we’re well-positioned for growth once the cycle turns and to
provide our investors with a range of high quality, long-term
investment options.”
Steve Bennett
Direct CEO
1. Returns refer to the following unit classes; DIF3 – Wholesale, PFA – Ordinary
and DOF – Wholesale A.
2. Benchmark refers to S&P/ASX 300 A-REIT Accumulation Index. Charter Hall Maxim
Property Securities Fund and Benchmark Index returns series as at June 2024,
over the past 10-year return period. Past performance is not a reliable indicator of
future performance.
3. DOF, DIF3, DIF4, LWF – returns assume Bonus Units or Entitlement Offer as per
respective PDS.
4. Benchmark refers to the headline MSCI/IPD Unlisted Core Wholesale Property Fund
Index returns series as at June 2024, since the respective fund inception dates. Years
shown are indicative of inception year to 30 June 2024, though returns are as at exact
inception date. Past performance is not a reliable indicator of future performance.
-10%
-5%
0%
5%
10%
15%
20%
25%
DOF1
2014-2024
PFA1
2017-2024
DIF31
2014-2024
DIF4
2016-2024
BW Trust
2014-2024
LWF
2017-2024
WPS1
2020-2024
WPS2
2022-2024
Maxim2
2014-2024
Australian Office
Australian Industrial & Logistics
Australian Diversified
Direct Fund (% p.a.)3
Benchmark (% p.a.)4
7.7%
13.2%
5.6%
7.4%
3.8%
14.4%
5.8%
4.0%
6.3%
0.6%
9.8% 9.1%
(2.8%)
(4.6)%
3.0%
5.6%
1.9%
3.2%
51-81 Freight Street
Lytton Qld
Quandamooka, Turrbal
and Yuggera land
The Direct funds have
a strong track record
of outperformance.
Direct funds net return since inception
31
30 Charter Hall Group Annual Report 2024 / Direct
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1. For assets in operational control reported
under Scope 2 emissions.
2. Our Net Zero target applies to Scope 1
and Scope 2 emissions for existing assets
that fall under the operational control of
responsible entities for which Charter
Hall Limited is the controlling corporation.
Where residual Scope 1 emissions are
offset, Charter Hall will use high quality
nature‑based offsets.
Sustainability
Framework
2024 Sustainability Report
More information provided in
our 2024 Sustainability Report.
Our strategic pillars align
with the United Nations
Sustainable Development
Goals and enable us to:
Cultivate
deep, trusted relationships
with stakeholders and
high‑performing talent.
Respond
to the challenges and
consequences of a warming
climate through rethinking
how we use resources and
prioritising the protection
and restoration of nature.
Drive
lasting change through
partnerships that deliver
learning and employment
opportunities for vulnerable
young Australians and support
communities impacted by
natural disaster and hardship
through strong communities,
healthy places and pathways
to prosperity.
Deliver
long-term value and mutual
success for our investors,
customers and communities.
Sustainability
Our approach to sustainability is practical,
platform‑wide and integrated into how the
Group does business, delivering value for our
stakeholders. To ensure our approach is current
and fully informed, our review of our material issues
includes research into pivotal global shifts, as well as
emerging ESG issues, stakeholder interests, thought
leadership and peer reporting in the real estate and
construction sectors.
The Group’s Sustainability Framework focuses our efforts on where we
can generate the greatest value and make the most difference over the
long-term. Our purpose and values guide how we deliver on the full range
of economic, environmental, and social impacts that we promise.
Achievements in FY24
Powered by
clean energy
80MW of onsite solar installed
to date, with >77% directly
supplying our tenants. >80% of
our grid-supplied electricity from
renewable sources1.
71% reduction in
carbon emissions
(Scope 1 and 2)2 against FY17
baseline, with an 8% reduction
achieved through nature-based
carbon offsets.
Support for disaster
and hardship
Invested over $1.4m to support
communities with resources to build
and rebuild strong foundations.
ESG leadership
and performance
15 Charter Hall funds scored in
the top 20% of GRESB, with three
Funds recognised as leaders in
their peer group.
Partnering in our
supply chain
Over $2.6m in procurement
spend with social enterprise
and First Nations businesses.
Australia’s largest
independently rated
green space
~7.1m sqm of Green Star
Performance rated space2.
89% employee
engagement
Nine points above the
high‑performing industry norm.
$6.4bn sustainable
finance transactions
to date
Increased by $3bn in the period
covering approximately ~21% of all
platform facilities.
E
c
o
n
o
m
i
c
E
n
vi
r
o
n
m
e
n
t
S
o
c
i
al
S
t
a
k
e
h
o
l
d
e
r
s
Climate
action
Rethink
resources
Strong
communities
Healthy
places
Sustained
returns
Restore
nature
High-performing
talent
Deep customer
partnerships
Pathways to
prosperity
V
a
l
u
e
s
S
t
r
a
t
e
g
y
Purpose
Creating better
futures by driving
value and mutual
success
Pill
ar
s
Go
ve
rna
nc
e
32 Charter Hall Group Annual Report 2024 / Sustainability
33
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1. Our Net Zero target applies to Scope 1 and Scope 2 emissions for existing assets that fall under the operational control of responsible entities for which
Charter Hall Limited is the controlling corporation. Where residual Scope 1 emissions are offset, Charter Hall will use high quality nature-based offsets.
2. Eligible assets in operational control.
3. Measure of total solar installed within the portfolio,. Includes a mix of solar directly installed by Charter Hall or acquired during acquisition.
4. Target is to be achieved without carbon offsets, and the boundary includes energy use equipment in the lease that is landlord responsibility. Target reflects
current business activity and plan. Charter Hall will monitor emerging reporting frameworks, reserving the right to change the target in the future.
Progress against our sustainability targets
Strategic pillar
FY24 performance
Looking forward
Climate action
Scope 1 and 2
carbon emissions
–
71% reduction in carbon emissions
(Scope 1 and 2)1 against FY17 baseline
–
Net Zero emissions by 2025
(Scope 1 and 2)1
Clean energy
–
81% renewable electricity supplied to
our assets, underpinned by long-term PPA2
–
100% electricity supplied from
renewable sources by 2025 for
assets in operational control
–
80MW of onsite solar installed
Group‑wide,3 an uplift of 23% since FY23
–
An additional 11MW of solar
committed or planned
during FY25
Scope 3 emission
target
–
77% of the onsite solar across the Group
supplies tenants with clean energy, reducing
our downstream Scope 3 emissions
–
Over 50% reduction in emissions
per square meter of lettable area
in our leased assets by 2030
(Cat 13)4, against the
baseline year
Energy performance
–
Maintained 5.1 star NABERS Energy rating
for Office portfolio, covering 100% of
eligible assets,2 an uplift of 0.1 star
–
Target 5.5 star NABERS Energy
for Office portfolio by 2025
–
Maintained 5.1 star NABERS Energy rating
for Shopping Centre Retail portfolio, covering
80% of eligible assets2
–
Maintain NABERS Energy for
Shopping Centre Retail portfolio
Benchmarking
performance
–
Australia’s largest footprint of
independently rated green space
–
~7.1m sqm of Green Star Performance rated
space across the country for our Office,
Retail and Industrial & Logistics sectors
–
5.0 star Green Star Performance for
Office portfolio, covering 93% of
eligible assets2
–
3.0 star Green Star Performance for Retail
portfolio, covering 100% of eligible assets2
–
2.0 star Green Star Performance for
Industrial & Logistics portfolio, covering
71% of eligible assets2
–
Maintain Green Star Performance
rating, while transitioning
to the updated rating tool
Strategic pillar
FY24 performance
Looking forward
Rethink resources
Operational waste
–
52% of operational waste diverted
from landfill for Office portfolio, a 19%
improvement from last year
–
40% operational waste diverted from landfill
for Shopping Centre Retail portfolio, a
1% improvement from last year
–
75% diversion target from landfill
by 2030 for Retail Shopping
Centre portfolio portfolios where
Charter Hall manages waste
Align to circular
economy
–
Circular Economy Framework adopted
–
Implementation of our circular
economy framework
Restore nature
Potable water
consumption
–
518kL/sqm water intensity, up 10% from
last year as a result of higher occupancy
in our assets
–
Improve understanding of water
consumption through submetering
Water performance
–
4.5 star NABERS Water for Office portfolio,
covering 96% of eligible assets2, a decrease
of 0.2 star
–
4.1 star NABERS Water for Shopping Centre
Retail portfolio, covering 70% of eligible
assets2, a decrease of 0.1 star
–
Target 5.0 star NABERS Water for
Office portfolio rating by 2025
High-performing talent
Inclusion, diversity
and equality
–
29% female participation on the CHC
Board and 38% in senior management
–
Achieved an employee engagement of 89%
and 95% employee participation rate in its
Annual Engagement Survey
–
Received Silver status in the annual Pride
in Diversity Australian Workplace Equality
Index (AWEI)
–
Maintained Workplace Gender Equality
Agency (WGEA) recognition for
gender equality
–
Sustain levels of engagement
that align with being a global
high-performing culture
Deep customer partnerships
Customer satisfaction
–
86% tenant customer retention rate
–
61% (by income) of our tenant
customers hold leases in more than
one Charter Hall tenancy
–
Our combined cross-sector NPS held
steady at +52, a strong result for the
third year
–
Investing in centralised and
connected data to deepen
our understanding of
customer needs
34 Charter Hall Group Annual Report 2024 / Sustainability
35
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Strategic pillar
FY24 performance
Looking forward
Strong communities
Community investment
–
Donated over $1.4 million to support
communities with resources to build and
rebuild strong foundations
–
Continue to co-create initiatives
that make a genuine long-term
impact for our communities
First Nations
–
Released our Innovate RAP, which focusses
our efforts on empowering First Nations
people to drive their own economic future
Health and well-being
Healthy buildings
–
Achieved 5 stars or above NABERS Indoor
Environment on more than 1m sqm,
representing 36 Office assets. Maintained
WELL Health Safety rating for 56 Office
assets covering over 1.4m sqm
–
Continue to improve the indoor
environment for our tenants,
benchmarked through NABERS
Indoor Environment, WELL Health
Safety and WELL at Scale
Workforce health
and safety
–
Lost Time Injury Frequency Rate (LTIFR) =
3.4. includes employees and contractor
Pathways to prosperity
Create employment
opportunities
–
222 youth employment
outcomes generated
–
Achieve 400 employment
outcomes for vulnerable young
Australians by 2025 and 1,200
by 2030
Employee volunteering
–
Provided 3,766 hours of employee
volunteering, which equates to $315k,
up 11% from last year
–
Volunteer 6,000 hours in the
community by FY25
Social procurement
–
Procured over $2.6m with social
enterprises and First Nations businesses
–
Continue to partner to create
enduring impact
Sustained returns
Sustainable finance
–
Provided $6.4bn of sustainable finance
transactions, up $3bn since FY23 and
comprising ~22% of total debt
–
Leverage approach to ESG
to support future sustainable
financing opportunities
Governance
Transparency and
disclosure
–
15 out of 29 Charter Hall funds scored in
the top 20% of GRESB, with three funds
recognised as peer group leaders
–
Maintained Australia’s largest Green
Star Performance certified portfolio
–
Published our fourth Modern
Slavery Statement
–
Actively monitor progress of
International Sustainability
Standards Board and future
integration of environmental
and financial metrics
Climate-related disclosure
We are actively aligning our climate action
approach to the requirements of the draft Australian
Sustainability Reporting Standards and maturing our
understanding of the impacts of climate-related risks
and opportunities on our financial position, financial
performance and cashflows.
Governance
Charter Hall’s Board has ultimate responsibility for
our sustainability strategy, policies, and the oversight
of our climate-related risks and opportunities within
the business. They are supported by the Audit Risk
and Compliance Committee (‘ARCC’), which receives
quarterly updates from the Executive Committee on
sustainability issues and initiatives.
Responsibility for the oversight of climate-related
risks and opportunities is outlined in the ARCC
charter, as part of the committee’s responsibility to
review the Group’s Risk Management Framework
and Risk Register, where the Group’s key strategic
and operational risks and mitigants for those risks
are recorded.
The Managing Director & Group CEO has
responsibility for the day-to-day management and
strategic direction of the business, as well as fostering
an environment that supports embedding ESG into
business strategy. The Executive Committee have
strategic oversight of ESG strategy, target setting,
monitoring and implementation. Our ESG Committee
makes recommendations on targets, and focuses on
the platform-wide alignment and the implementation
of our ESG strategy and initiatives
We have ESG Performance metrics included in short
term incentives for Non-Executive Directors, Managing
Director and Executives. In FY24 these included
measures related to progress on decarbonisation,
including working towards our carbon targets and
increasing our solar installed. These measures are
cascaded across our management teams including
Fund Managers, Asset Managers and Development
Managers through our balanced scorecard approach.
Strategy
Charter Hall has a longstanding commitment to
delivering meaningful action on climate change.
Our strategy to meet our Net Zero carbon emission
goals and strengthen the resilience of our assets to
climate-related impacts is:
–
Achieve highly energy efficient portfolio powered
by clean energy;
–
Partner with our customers and suppliers to reduce
emissions in our value chain;
–
Improve the adaptive capacity of our portfolio to
climate-related impacts;
–
Support communities with both immediate relief
and long term recovery from natural disasters;
–
Collaborate toward Net Zero and climate resilience.
Risk Management
In FY24, we undertook a series of climate-related risk
and opportunity workshops with Senior Leaders from
across the business to reassess our climate-related
risks and opportunities across our three future climate
scenarios between now and 2050. The workshops
identified the following climate-related exposures:
–
Adapting products and services;
–
Access to capital;
–
Partnerships to support transition;
–
Resource availability;
–
Supply chain;
–
Policy and regulation;
–
Physical impacts to assets.
To assess the physical exposure of stabilised assets,
new developments, and new acquisitions, Charter
Hall utilises downscaled, location-specific climate
data to assess the likelihood of acute and physical
impacts. We have utilised an RCP8.5 future climate
scenario to undertake physical risk assessments,
using 2050 outcomes, as a ‘worst case’ future
scenario. We are currently evaluating inherent risk
with consideration for building attributes in line with
our Risk Management Framework. We have identified
a range of adaptation measures to further reduce risk
that will be incorporated into strategic asset plans.
In FY25, we aim to further understand the effect of our
climate-related risk and opportunities on our business
model, strategy and value chain.
36 Charter Hall Group Annual Report 2024 / Sustainability
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Metrics and Targets
Net Zero carbon by 20251
–
71% reduction in absolute Scope 1 and
Scope 2 emissions supported by our approach
to renewables, as well as execution of our
nature‑based offset strategy1
100% renewable electricity by 20252
–
81% renewable electricity supplied to assets in
operational control
>50% reduction in tenant-related emissions intensity
by 20303
–
Improved our measurement approach and sought
third party assurance on our FY22 baseline
Climate scenarios
We understand that there are global uncertainties
which relate to emissions pathways, pace of policy
implementation, changing demographics, supply
chain impacts and resource availability, as well as the
effectiveness of technology and pace of investment.
We have adopted climate scenarios to test the
resilience of our business to these uncertainties.
In FY22, we developed our climate scenarios, and
during FY24 we commenced testing the resilience of
our business strategy and model using the climate
scenarios. The scenarios have been informed by
qualitative and quantitative inputs from a range of
sources including Intergovernmental Panel on Climate
Change, Network for Greening the Financial System
and International Energy Agency.
Each of these scenarios are centred around specific
societal pressures led by demand, supply or market
drivers respectively, and use quantitative and
qualitative projections of socioeconomic drivers
including population, GDP and urbanisation to model
energy use, air pollution, land use and greenhouse
gas emissions.
Our scenarios have been created to test future climate
related risks and opportunities for the Group.
Scenario
Equitable Well-being
Technology and Policy Effectiveness
Regional Rivalry
Societal action increases global technology
adoption and policy effectiveness,
therefore reducing global warming
beyond current forecasts. This scenario
tests demand side enablers of rapid
decarbonisation driven by a unified desire to
create equitable well-being for all.
Socioeconomic trends rely on technology and policy
effectiveness to limit global warming. This scenario
is “middle of the road” and tests the effectiveness of
technology and policy response to decarbonising a
growing economy.
This scenario is likely to see a breakdown
in international policy collaboration
and investment in clean technology.
This scenario tests supply side challenges
to global decarbonisation which are
expected to occur from increased physical
climate change impacts. Climate impacts
create increased regional rivalry and
resource protectionism.
–
Degree warming potential 2.5°C, or
assuming extreme mitigation efforts are
in place, an opportunity to achieve a
1.5°C outcome
–
SSP2 shifting towards SSP1
–
RCP4.5 to RCP2.6
–
Degree warming potential 3.0°C, or assuming
extreme mitigation efforts are in place, below
2.0°C outcome
–
SSP2
–
RCP6.0 to RCP2.6
–
Degree warming potential 3.5°C, or
assuming extreme mitigation efforts
are in place, an opportunity to achieve a
2.5°C outcome
–
SSP2 shifting towards SSP3
–
RCP7.0 to RCP3.4
Key indicators
Demand-side drivers
Population peaks at 8.5 billion in 2050
No net deforestation by 2050
Sea level rise 0.5 metres by 2100
Net Zero emissions by 2080
Market-led drivers
Population stable at 9.2 billion by 2050
One percent net forest loss by 2050
Sea level rise 0.6 metres by 2100
Net Zero emissions after 2100
Supply-side drivers
Population 10 billion in 2050
4 percent net forest loss by 2050
Sea level rise 0.7 metres by 2100
Doubling of emissions by 2100
1. Our Net Zero target applies to Scope 1 and Scope 2 emissions for existing
assets that fall under the operational control of responsible entities
for which Charter Hall Limited is the controlling corporation. Where
residual Scope 1 emissions are offset, Charter Hall will use high quality
nature‑based offsets.
2. Eligible assets in operational control.
3. Applies to emission from energy using equipment in the lease that is
landlord responsibility, against FY22 baseline year.
Geoscience Australia
Narrabundah ACT
Ngunnawal land
38 Charter Hall Group Annual Report 2024 / Sustainability
39
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Management
Board of Directors
See pages 51-52
for information on the Directors.
Leadership
From Left:
Greg Paramor AO Independent Non-Executive Director
Jacqueline Chow FAICD Independent Non-Executive Director
David Clarke Chair/Independent Non-Executive Director
David Harrison Managing Director & Group CEO
Karen Moses Independent Non-Executive Director
Stephen Conry AM Independent Non-Executive Director
David Ross Independent Non-Executive Director
From Left:
Anastasia Clarke Chief Financial Officer
Richard Stacker Industrial & Logistics CEO
Steve Bennett Direct CEO
Natalie Devlin Chief Experience Officer
David Harrison Managing Director & Group CEO
Ben Ellis Retail CEO
Carmel Hourigan Office CEO
Sean McMahon Chief Investment Officer
Avi Anger Diversified CEO
40
40 Charter Hall Group Annual Report 2024 / Leadership
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David Harrison
Managing Director &
Group CEO
BBus (Land Economics), FAPI,
GradDip Applied Finance
See page 52.
Richard Stacker
Industrial & Logistics CEO
BBA (Accounting and Finance)
Richard has over 30 years of
experience in real estate funds
management, real estate finance,
accounting and risk management.
With experience across all our
sectors, Richard brings broad
insights and perspective to his role
as Industrial & Logistics CEO, having
led the establishment, structuring,
funding and management of
new funds, and overseeing the
transactional, development, asset
and property management.
Driven by an ethos of creating better
futures, Richard believes Charter Hall’s
willingness to partner with tenants
and investors across sectors is a
key differentiator. He is focused on
ensuring our funds remain resilient
through cycles, unlocking greater
financial success for our investors and
partners, while delivering best-in-class
solutions to tenants for the long‑term.
This has been demonstrated
throughout Richard’s long career with
Charter Hall, having previously held
other senior leadership roles, including
Head of Global Investor Relations and
prior to that, Direct CEO.
Richard serves as a Board member
for Charter Hall’s largest Wholesale
Industrial Fund as well as other
Charter Hall entities. Richard has
spent many years representing
Charter Hall on the Board of Advisers
for the Property Industry Foundation.
He is a member of the Institute of
Chartered Accountants in Australia.
Before joining Charter Hall,
Richard held the roles of Division
Director of Macquarie Group and
CEO of Macquarie Direct Property
Management Limited, General
Manager with Lendlease
Corporation, and senior manager
with PricewaterhouseCoopers.
Steve Bennett
Direct CEO
BBA, CA, GAICD
Steve is CEO of the Direct property
business within Charter Hall. In addition
to overseeing approximately $9 billion
of assets on behalf of self‑managed
super funds, family offices,
high‑net‑worth and direct investors,
Steve manages a team of property and
funds management professionals who
are responsible for unlisted property
funds across all the core real estate
sectors. His day-to‑day responsibility
includes overseeing asset
management and tenancy services,
managing the financial structure of the
funds, stakeholder communications
and raising new equity capital.
Steve is a past President of the
Australian Property Funds Association
and is currently the Vice-President of
the PCA NSW Divisional Council.
Prior to joining Charter Hall, Steve
worked for Macquarie Bank in Sydney
and London. Steve has over 23 years’
of experience in funds management,
banking, property, accounting and
consultancy and is a member of the
Institute of Chartered Accountants in
Australia and New Zealand. Steve is a
graduate of the Australian Institute of
Company Directors.
Natalie Devlin
Chief Experience Officer
BA, Postgrad Dip in MR Management
Natalie has over 20 years’ of
experience across Asia Pacific, leading
and implementing organisational
development and transformational
change. In over 10 years at Charter
Hall, she has focused on bringing to
life its unique market proposition, built
upon a philosophy of “better futures
and mutual success” for customers,
employees and communities. Using
the levers of capability, brand, culture
and workplace, Natalie is integral
to how we scale and transform
the Group, driving cross-sector
connectivity and ensuring we retain
our inventive spirit as we grow. She has
driven the Group’s environmental,
social and governance strategy,
including its ongoing commitment
to creating strong local communities
and tangible outcomes for
vulnerable young Australians using the
Pledge 1% framework.
Passionate about continuous
improvement, Natalie’s previous
roles include Head of People and
Development at Valad Property Group,
where she established the human
resources function during its rapid
growth period, and Head of HR, Asia
Pacific for a multinational publishing
company, where she transformed its
operating model.
Natalie represents Charter Hall on the
National and NSW Board of Advisors
for the Property Industry Foundation,
and is a member of Chief Executive
Women and IWF Australia.
Ben Ellis
Retail CEO
BAS (Property Economics)
Ben brings more than 25 years’
experience in the property market,
and with that, a deep knowledge of
Charter Hall’s business.
As Fund Manager of the Charter
Hall Retail REIT and Charter Hall’s
Retail CEO, Ben is responsible for all
management aspects of the Retail
Funds Management platform to
deliver value creation within the retail
portfolio and optimise returns for our
investors. Ben’s focus on delivering
mutual success for our customers
has remained consistent throughout
his dynamic 22-year career with
Charter Hall.
Ben is driven by his passion to foster
strong and sustainable relationships
that add value for investor customers,
tenant customers, partners and
communities. Under his leadership,
the Retail sector has been recognised
for its innovative spirit, with the
development of two significant
technologies - Autom8 and Lease Easy
- that have transformed the way Retail
does business for our people and for
our customers.
Prior to becoming the Retail CEO,
Ben held several roles with Charter
Hall including Head of Retail Wholesale
and Head of Capital Transactions,
overseeing more than $25 billion of
gross transactions across all sectors.
Carmel Hourigan
Office CEO
BBus (Land Economics),
GradDip Finance and Investment
Carmel brings 30 years’ experience
in the real estate investment industry,
spanning key senior leadership
positions and roles in funds
management across public and private
markets, investment, research and
advisory services.
As Office CEO, Carmel is responsible
for driving the office business’
strategic growth, including funds
management, portfolio curation,
capital raising and equity flows.
Carmel’s previous roles include the
Global Head of Real Estate at AMP
Capital, CIO at GPT Group and Head of
Investment Management at Lendlease.
Carmel has served as a Director of
the Property Council of Australia for
9 years, including Vice President.
Carmel currently serves as a member
of the Property Champions of Change
group. Carmel is also a former
member of the Trustee Board and
Deputy Chancellor of Western Sydney
University.
Sean McMahon
Chief Investment Officer
BBus (Property)
Sean has over 30 years of property
and investment banking experience
in the real estate sector and is active
in the listed, wholesale and direct
capital markets.
As Chief Investment Officer, Sean is
responsible for the Group’s strategy
and balance sheet investments,
mergers and acquisitions, with
oversight for multi-sector disciplines
including property transactions and
corporate development. He brings
a wealth of experience across
investment markets, diversified
across office, industrial and retail
sectors, and has been responsible for
driving the development of corporate
strategies, capital allocation and
reinvestment programs.
Prior to joining Charter Hall, Sean
worked at national diversified property
group Australand (now Frasers) as
Chief Investment Officer and was
previously responsible for investment
and development for all commercial,
industrial and retail property.
Prior to Frasers, Sean spent seven
years at Macquarie Bank as a senior
executive in the Property Investment
Banking division undertaking
property finance, structured finance,
funds management and joint
venture transactions.
Anastasia Clarke
Chief Financial Officer
FCA, FCPA, B.Acc
Anastasia brings over 30 years’
experience in the real estate
industry across finance, risk
management, funds management,
asset management, development,
and construction.
As the Chief Financial Officer at
Charter Hall, Anastasia is responsible
for overseeing all Finance functions,
leading a team of over 180 dedicated
individuals who ensure the ongoing
resilience of our business.
Anastasia strongly believes in
collaboration, innovation, and
continuous learning, fostering a
supportive workplace environment
that focuses on growth, creativity,
and mutual support.
Anastasia has previously served as the
Chief Financial Officer at GPT Group,
New City, and as the Head of Finance
and Group Treasurer at Dexus.
Anastasia is a member of Chief
Executive Women (CEW) and has
previously served as the Board Director
of the Property Council of Australia
and Audit & Risk Board Committee at
Western Sydney University.
Avi Anger
Diversified CEO
BCom, MCom
Avi has over 20 years’ experience
in real estate funds management,
corporate finance and accounting.
As CEO of Charter Hall’s Diversified
funds business, Avi is responsible
for a team of property and funds
management professionals
managing approximately $11 billion
of assets on behalf of wholesale and
listed investors.
Avi joined Charter Hall in 2003 and
has played an integral role in delivering
the strong growth of Charter Hall’s
funds management business. Prior
to his current role, Avi was Head
of Transactions and Advisory and
was responsible for all property
transactions of the Group and its
managed funds.
During his time at Charter Hall, Avi
has been involved in the creation of
new funds and partnerships for the
Group as well as maintaining and
developing relationships with new and
existing investor customers. Notably,
Avi led the establishment and listing
of the Charter Hall Long WALE REIT
(ASX:CLW) in 2016 and continues to
lead CLW as Fund Manager.
Avi is currently Chair of Property
Council of Australia Capital Markets
Global Investment Committee and
Member of the Property Council
of Australia Capital Markets
Division Council.
Prior to joining Charter Hall, Avi worked
for Ernst & Young Corporate Finance
and Terrace Tower Group. Avi holds a
Bachelor or Commerce and a Master
of Commerce from the University of
New South Wales.
42 Charter Hall Group Annual Report 2024 / Leadership
43
Back to Contents
Directors’ Report
and Financial
Report
For the year ended 30 June 2024
Wesley Place, Melbourne Vic.
Wurundjeri and Bunurong land
Contents
Directors’ Report
46
Auditor’s Independence Declaration
82
Consolidated Statements of Comprehensive Income 83
Consolidated Balance Sheets
85
Consolidated Statement of Changes in Equity -
Charter Hall Group
86
Consolidated Statement of Changes in Equity -
Charter Hall Property Trust Group
87
Consolidated Cash Flow Statements
88
Notes to the Consolidated Financial Statements
90
Directors’ Declaration to Securityholders
142
Independent Auditor’s Report
144
44 Charter Hall Group Annual Report 2024 / Directors’ Report and Financial Report
45
Back to Contents
The Directors of Charter Hall Limited and the Directors of Charter Hall Funds Management Limited, the Responsible Entity (RE) of
Charter Hall Property Trust, present their report together with the consolidated financial report of the Charter Hall Group (Group or
CHC) and the consolidated financial report of the Charter Hall Property Trust Group (CHPT Group) for the year ended 30 June 2024,
and the independent auditor’s report thereon. The financial report of the Group comprises Charter Hall Limited (Company or CHL) and
its controlled entities, which include Charter Hall Funds Management Limited as the RE of Charter Hall Property Trust (CHPT or Trust)
and CHPT and its controlled entities. The financial report of the Charter Hall Property Trust Group comprises the Trust and its
controlled entities.
Charter Hall Limited and Charter Hall Funds Management Limited have identical Boards of Directors. The term Board hereafter should
be read as a reference to both these Boards.
The units in the Trust are ‘stapled’ to the shares in the Company. A stapled security comprises one Company share and one Trust unit.
The stapled securities cannot be traded or dealt with separately.
Directors
The following persons were Directors of the Group during the year and up to the date of this report.
‒
David Clarke
‒
Jacqueline Chow
‒
Stephen Conry AM
‒
David Harrison
‒
Karen Moses
‒
Greg Paramor AO
‒
David Ross
‒ Chair and Independent Non-Executive Director
‒ Independent Non-Executive Director
‒ Independent Non-Executive Director
‒ Managing Director and Group CEO
‒ Independent Non-Executive Director
‒ Independent Non-Executive Director
‒ Independent Non-Executive Director
Distributions/Dividends – Charter Hall Group
Distributions/dividends paid/payable to stapled securityholders during the year were as follows:
2024
$'m
Final ordinary distribution of 2.30 cents and final ordinary dividend of 20.70 cents per stapled security for
the six months ended 30 June 2024 payable on 30 August 2024
108.7
Interim ordinary distribution of 12.15 cents and interim ordinary dividend of 9.94 cents per stapled
security for the six months ended 31 December 2023 paid on 29 February 2024
104.5
Total Distributions/Dividends paid and payable to stapled securityholders
213.2
Operating and financial review
The Group recorded a statutory loss after tax attributable to stapled securityholders for the year to 30 June 2024 of $222.1 million
compared to a profit of $196.1 million for the year ended 30 June 2023.
Operating earnings amounted to $358.7 million for the year to 30 June 2024, compared to $441.2 million for the year ended 30 June
2023, a decrease of 18.7%. Operating earnings is a financial measure which represents statutory profit after tax adjusted for the items
in the table below. Operating earnings is used by the Board to make strategic decisions and as a guide to assessing an appropriate
distribution to declare.
2024
2023
$'m
$'m
Operating earnings attributable to stapled securityholders
358.7
441.2
Net fair value movements on investments & property1
(461.7)
(220.7)
Net gain/(loss) on disposal of equity accounted investments1
(17.9)
–
Non-operating income tax benefit/(expense)
8.3
4.6
Realised and unrealised net (losses)/gains on derivatives1
(43.9)
(8.5)
Impairment of equity accounted investments
(48.4)
(9.1)
Performance fees expense1
3.6
3.0
Amortisation expense
(23.2)
(18.7)
Other1
2.4
4.3
Statutory profit/(loss) after tax attributable to stapled
(222.1)
196.1
1 Includes the Group's proportionate share of non-operating items of equity accounted investments on a look through basis.
Operating and financial review continued
The 30 June 2024 financial results with comparatives are summarised as follows:
Charter Hall Group
Charter Hall Property
Trust Group
2024
2023
2024
2023
Revenue ($ million)
597.8
869.7
25.0
21.8
Statutory (loss)/profit after tax for stapled securityholders ($
million)
(222.1)
196.1
(375.0)
(115.9)
Statutory earnings per stapled security (EPS) (cents)
(47.0)
41.5
(79.3)
(24.5)
Operating earnings for stapled securityholders ($ million)
358.7
441.2
n/a
n/a
Operating earnings per stapled security (cents)
75.8
93.3
n/a
n/a
Distribution/dividend per stapled security (cents)
45.1
42.5
14.5
23.4
Property investment segment EBITDA ($ million)1
271.0
248.5
n/a
n/a
Development investment segment EBITDA ($ million)1
36.4
36.6
n/a
n/a
Funds management segment EBITDA ($ million)1
271.6
375.4
n/a
n/a
Total assets ($ million)
3,643.7
4,072.6
2,697.5
2,892.2
Total liabilities ($ million)
823.1
817.4
948.2
698.4
Total net assets ($ million)
2,820.6
3,255.2
1,749.3
2,193.8
Net assets attributable to stapled securityholders ($ million)
2,820.6
3,255.2
1,749.3
2,193.8
Stapled securities on issue (million)
473.0
473.0
473.0
473.0
Net assets per stapled security ($)
5.96
6.88
3.70
4.64
Net tangible assets (NTA) attributable to stapled securityholders
($ million)2
2,596.6
2,971.6
1,749.3
2,193.8
NTA per stapled security ($)2
5.49
6.28
3.70
4.64
Balance sheet gearing3
3.0%
2.2%
n/a
n/a
Funds under management (FUM) ($ million)4
80,912.9
87,420.9
n/a
n/a
Property FUM ($ million)
65,529.3
71,864.9
n/a
n/a
1
Segment earnings and revenue is used by the Group CEO in assessing the performance and allocating of resources to its operating segments.
2
NTA attributable to stapled securityholders and NTA per stapled security ($) are calculated using total assets less total liabilities, net of intangible assets (including
goodwill recorded in the carrying value of equity accounted investments and share purchase option derivatives) and related deferred tax and non-controlling interests in
NCI not related to CHPT. NTA includes right of use assets.
3
Gearing is calculated as interest-bearing debt drawn (excluding hedged foreign exchange movements subsequent to the related debt drawing) net of cash, divided by
total assets net of cash and derivative assets.
4
Includes 100% of Paradice Investment Management Funds Management Portfolio $15.4 billion (30 June 2023: $15.6 billion), of which the Group owns 50%.
Directors’ Report
47
46 Charter Hall Group Annual Report 2024 / Directors’ Report and Financial Report / Directors’ Report
Back to Contents
Operating and financial review continued
Development investment
Development investment provides the Group with development profits and interest income from its development assets held directly on
balance sheet and through co-investments in development ventures. During the year, development investment contributed $36.4
million (30 June 2023: $36.6 million) in segment EBITDA to the Group.
Funds management
The funds management business provides investment management, asset management, property management, development
management and leasing and transaction services to the Group’s $65.5 billion property funds management portfolio. The Group also
holds a 50% interest in Paradice Investment Management, a fund manager with $15.4 billion in funds under management invested in
Australian and global listed equities.
During the year, the funds management business contributed $271.6 million (30 June 2023: $375.4.8 million) in segment EBITDA to
the Group.
Significant changes in the state of affairs
There were no significant changes in the state of affairs of the Group during the period.
Operating and financial review continued
Property investment
Property investment provides the Group with yields from its co-investments in Group funds. During the year property investment
contributed $271.0million (30 June 2023: $248.5million) in segment EBITDA to the Group.
The Group’s property investments are classified into the following real estate sectors:
‒
Industrial & Logistics;
‒
Convenience Net Lease Retail;
‒
Office;
‒
Social Infrastructure;
‒
Shopping Centre Retail; and
‒
Diversified.
The following table summarises the key metrics for the property investments of the Group:
FY2024 Weighted
Weighted Weighted Weighted
FY2024
Charter Hall
average
average
average
averageCharter Hall
Ownership
Charter Hall
investment
lease market cap
discount
rental investment
stake
investment
EBITDA1
expiry
rate
rate
reviews
yield2
(%)
($m)
($m)
(years)
(%)
(%)
(%)
(%)
Industrial & Logistics
Charter Hall Prime Industrial Fund (CPIF)
1.3
110.2
6.7
9.7
5.1
7.0
3.2
3.4
Charter Hall PGGM Industrial Partnership (CHPIP)
12.0
33.9
3.2
7.6
5.6
7.0
3.0
2.5
Core Logistics Partnership Trust (CLP)
4.9
83.7
10.6
9.0
5.1
7.0
3.2
3.7
Long WALE Hardware Partnership (LWHP)
16.8
217.4
16.7
5.7
5.0
6.2
2.6
3.2
Charter Hall Direct Industrial Fund No. 4 (DIF4)
1.8
33.3
2.0
9.6
5.4
7.0
3.1
4.5
Office
Charter Hall Prime Office Fund (CPOF)
4.8
230.4
23.8
6.5
5.7
6.7
3.5
4.5
Charter Hall Office Trust (CHOT)
15.7
224.2
26.9
7.4
5.2
6.6
3.6
3.7
Charter Hall Direct PFA Fund (PFA)
12.6
120.8
16.8
5.4
6.4
7.1
3.5
5.7
CH 52 Martin Place Trust (CH52MPT)
50.0
120.3
5.9
31.0
4.8
6.5
3.8
3.9
Charter Hall Direct Office Fund (DOF)
8.7
115.2
15.1
5.8
6.1
6.8
3.6
5.9
Brisbane Square Wholesale Fund (BSWF)
16.8
110.9
13.6
9.6
5.4
6.6
3.3
4.2
Genge Office Trust (CHGOT)
49.9
71.0
11.2
3.4
5.9
7.0
3.5
8.8
Other Office investments
96.4
12.4
n/a
n/a
n/a
n/a
n/a
Shopping Centre Retail
Charter Hall Retail REIT (ASX: CQR)
9.3
241.1
27.2
7.2
5.8
7.0
4.0
5.8
Net Lease Retail
CH DJ Trust (CHDJT)
43.2
61.1
5.9
16.7
5.1
6.8
2.5
3.5
CH Investment Trust (HPI)
50.0
46.0
2.3
n/a
n/a
n/a
n/a
11.6
Other Convenience Net Lease Retail investments
18.9
1.3
n/a
n/a
n/a
n/a
n/a
Social Infrastructure
Charter Hall Social Infrastructure REIT (ASX: CQE)
8.6
119.2
9.6
12.4
5.4
n/a
3.4
4.1
Charter Hall Exchange Wholesale Trust (CHEWT)
6.5
28.8
2.4
16.2
4.6
6.1
6.5
4.5
Other Social Infrastructure investments
78.8
5.2
n/a
n/a
n/a
n/a
n/a
Diversified
Charter Hall Long WALE REIT (ASX: CLW)
10.6
350.4
36.1
10.5
5.4
5.8
4.3
4.7
Charter Hall DVP Fund (DVP)
13.2
61.0
4.0
6.3
4.1
4.9
3.4
1.4
Charter Hall PGGM Industrial Partnership No. 2
(CHPIP2)
12.0
83.5
8.5
4.8
5.8
6.8
3.3
3.4
Other investments
101.7
3.5
n/a
n/a
n/a
n/a
n/a
Property Investment Total
2,758.2
271.0
7.2
5.7
6.8
3.4
4.7
1
Charter Hall Group property investment segment EBITDA per segment information in Note 1(b) of the financial report.
2
Yield = Operating earnings divided by investment value at start of the year adjusted for investments/divestments during the year. Excludes MTM movements in NTA
during the year.
49
48 Charter Hall Group Annual Report 2024 / Directors’ Report and Financial Report / Directors’ Report
Back to Contents
Information on Directors
David Clarke
Chair/Independent Non-Executive Director
Experience and expertise
David joined the Board of the Charter Hall Group on 10 April 2014
and was appointed Chair of the Board on 12 November 2014.
David has over 35 years’ experience in investment banking, funds
management, property finance and retail banking. David was
Chief Executive Officer of Investec Bank (Australia) Limited from
2009 to 2013.
Prior to joining Investec Bank, David was the CEO of Allco
Finance Group and a Director of AMP Limited, following five
years at Westpac Banking Corporation where he held a number
of senior roles including Chief Executive of the Wealth
Management Business, BT Financial Group. David was also
previously an Executive Director at Lendlease Corporation
Limited, Chief Executive of MLC Limited, and prior to this was
Chief Executive Officer of Lloyds Merchant Bank in London.
David holds a Bachelor of Laws degree.
Other current listed company directorships
AUB Group Limited
Former listed company directorships in last three years
Nil
Special responsibilities as at 30 June 2024
Chair of the Nominations Committee
Member of the Audit, Risk and Compliance Committee
Member of the Investment Committee
Interests in securities
49,875 stapled securities in Charter Hall Group via an indirect
interest
Jacqueline Chow, FAICD
Independent Non-Executive Director
Experience and expertise
Jacqueline joined the Board of the Charter Hall Group on 17
February 2021.
An experienced Non-Executive Director, Jacqueline is currently a
Non-Executive Director of Coles Group and nib Holdings Limited
and holds the role of Senior Advisor with McKinsey in their
Transformation Group. Prior to commencing her Non-Executive
career, Ms Chow held senior positions at Accenture, the Kellogg
Company, and Campbell’s, and most recently, she was the Chief
Operating Officer, Global Consumer and Food Service for
Fonterra.
Jacqueline holds a Bachelor of Science (Hons) from the
University of NSW and holds a Master of Business Administration
(Dean’s Distinguished Service Award) from the Kellogg School of
Management at Northwestern University.
Other current listed company directorships
Coles Group Limited
nib Holdings Limited
Former listed company directorships in last three years
Boral Limited (resigned 5th July 2024, delisted 5th July 2024)
Special responsibilities as at 30 June 2024
Member of the Audit, Risk and Compliance Committee
Member of the Nominations Committee
Interests in securities
10,000 stapled securities in Charter Hall Group
Stephen Conry AM
Independent Non-Executive Director
Experience and expertise
Stephen joined the Board of the Charter Hall Group on 16
January 2023.
Stephen brings over 40 years’ experience in executive positions
in the property industry in Australia and globally.
Stephen held the position of CEO at Jones Lang LaSalle (JLL)
Australia for 13 years until 2022, following a career with JLL that
spanned four decades, including serving as an International
Director for 22 years.
Stephen has held roles with numerous business and community
boards, including the Property Council of Australia where he was
National President from 2019 to 2021. Stephen is currently
Chairman of private investment company Langdon Capital Pty
Ltd, a member of the Commonwealth Remuneration Tribunal, a
Board member of Redkite, a Fellow of the Australian Property
Institute, a Fellow of the Royal Institution of Chartered Surveyors,
and Fellow of the Australian Institute of Company Directors.
Stephen was appointed a Member of the Order of Australia in the
2019 Queens Birthday Honours list for his service to the
Australian Commercial Property Sector and the Community.
Other current listed company directorships
Nil
Former listed company directorships in last three years
Nil
Special responsibilities as at 30 June 2024
Member of the Remuneration and Human Resources Committee
Member of the Investment Committee
Interests in securities
27,775 stapled securities in Charter Hall Group via an indirect
interest
Principal activities
During the year, the principal activities of the Group consisted of:
(a) Investment in property funds;
(b) Development investment; and
(c) Funds management.
Matters subsequent to the end of the period
No matter or circumstance has arisen since 30 June 2024 that
has significantly affected, or may significantly affect:
(a) The Group’s operations in future financial years; or
(b) The results of those operations in future financial years; or
(c) The Group’s state of affairs in future financial years.
Likely developments and expected results of
operations
Business strategy and prospects
The Group’s strategy is to use its specialist property expertise to
access, deploy and manage equity invested in office, industrial,
retail, diversified and social infrastructure property portfolios.
Charter Hall Group invests alongside equity partners to create
value and provide superior returns for clients and the Group’s
securityholders. Growth is driven by a strong development
capability that adds value for fund/partnership investors, whilst
deployment through acquisitions complements the development
capability to deploy the equity raised from investors in line with
each property’s strategy.
Charter Hall is well positioned to benefit from further capital
inflows from investors seeking property investments driven by the
positive spread between property returns and long-term interest
rates. During the last 12 months, the Group has seen positive
equity flows.
Various risks could impact the Group’s financial performance, and
the potential nature and impact of these risks can change over
time. The Group actively manages risks in line with the Group’s
Corporate Governance Framework and the Risk Management
Policy. In addition to the business risks referenced below, key
strategic and operational risks include breaches of cyber security
and privacy, work, health and safety, as well as environmental
(including climate change), social, governance and regulatory
risks. The Group is maturing its approach to the disclosure of
climate related financial risks and opportunities in line with the
emerging requirements of the draft Australian Sustainability
Reporting Standards, building upon the work to date on alignment
with Taskforce for Climate related Financial Disclosure
recommendations. In the reporting period management has
maintained a dedicated ESG Committee to drive platform-wide
alignment and implementation of its ESG Strategy, including
Group’s approach to climate related risks and opportunities.
These frameworks and policies can be found at
www.charterhall.com.au.
Property investment portfolio
The property investment portfolio of the Group is primarily
composed of co-investments in funds and partnerships where,
typically, between 5-20% of the equity in a fund is contributed by
Charter Hall. The percentage stake may be higher than the long-
term target at origination of the fund or partnership but will fall
toward the long-term target over time with external equity flows.
The Group regularly reviews the performance of its property
investment portfolio and may reduce its investment in funds to
reinvest into new partnerships or funds to align with new partners.
Sector diversification, industry diversification and earnings growth
of each fund/partnership co-investment, together with associated
funds management earnings derived from each fund/partnership,
combine to provide a matrix to which the balance sheet capital is
allocated. The material business risks faced by the property
investment portfolio that may have an effect on financial
performance of the Group include interest rate risk, refinancing
risk, lease defaults or extended vacancies, portfolio concentration
risks, development risk, joint venture risk and changes in
economic or industry factors impacting tenants, property values
or the ability to source suitable investment opportunities.
Development investment portfolio
The development investment portfolio comprises development
assets held directly on balance sheet and co-investments in
development associates and joint ventures. Primarily,
development investments will provide stabilised investment
opportunities made available to our funds.
The Group regularly reviews the performance of its development
investments and relevant economic drivers to actively manage
performance of each development.
The material business risks faced by the development investment
portfolio that may have an effect on financial performance of the
Group include interest rate risk, refinancing risk, development
risk, construction risk, leasing risk, joint venture risk and changes
in economic or industry factors impacting customers, property
values or the ability to source suitable investment opportunities.
Funds management platform
The Group manages primarily property investments on behalf of
listed, wholesale and direct investors and has strict policies in
place to ensure appropriate governance procedures are in place
to meet fiduciary responsibilities and manage any conflicts of
interest. Charter Hall provides a suite of services including
investment management, asset management, property
management, development services, treasury, finance, legal and
custodian services based on each fund’s individual requirements.
The Group regularly reviews investor requirements and
preferences for an investment partner in the Australian core real
estate sectors and transaction structures that would meet their
requirements.
The material business risks faced by the funds management
platform that may have an effect on the financial performance of
the Group include not delivering on investor expectations or
organisational conduct leading to loss of FUM or management
rights, loss of key personnel impacting service delivery, economic
factors impacting fee streams or property valuations,
development risk and access to capital.
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Information on Directors continued
including breast cancer research, the not-for-profit sector and real
estate and property investment industries.
Other current listed company directorships
Eureka Group Holdings Limited
Former listed company directorships in last three years
Nil
Special responsibilities as at 30 June 2024
Chair of the Investment Committee
Member of the Nominations Committee
Member of the Remuneration and Human Resources Committee
Interests in securities
14,300 stapled securities in Charter Hall Group via indirect
interests
David Ross
Independent Non-Executive Director
Experience and expertise
David joined the Board of the Charter Hall Group on 20
December 2016.
David has over 30 years’ corporate experience in the property
industry and has gained his experience both within Australia and
overseas, including a total of eight years as Chief Executive
Officer of GPT and Global Chief Executive Officer, Real Estate
Investments for Lendlease.
David is the Chair of Arena REIT, which owns, manages and
develops property in the childcare and healthcare sectors.
Previously, David held executive positions at GPT, Lendlease
and Babcock & Brown. Prior board appointments include a non-
executive directorship with Sydney Swans Foundation Limited.
David holds a Bachelor of Commerce from the University of
Western Australia and an Associate Diploma in Valuation from
Curtin University in Western Australia.
Other current listed company directorships
Arena REIT
Former listed company directorships in last three years
Nil
Special responsibilities as at 30 June 2024
Chair of the Remuneration and Human Resources
Member of the Investment Committee
Member of the Audit, Risk and Compliance Committee
Interests in securities
17,500 stapled securities in Charter Hall Group via indirect
interests
Company Secretary
Mark Bryant was appointed as Company Secretary on 24 August 2015.
Mark holds a Bachelor of Business (Accounting), a Bachelor of Laws (First Class Honours), a Graduate Certificate in Legal Practice,
and is admitted as a lawyer of the Supreme Court of NSW. Mark has over 19 years’ experience as a lawyer, including advising on
listed company governance, securities law, funds management, real estate, and general corporate law. Mark joined Charter Hall in
2012, prior to which he was a Senior Associate in the Sydney office of King & Wood Mallesons.
Mark is the General Counsel and Company Secretary for the Charter Hall Group.
Meetings of Directors
The number of meetings of the Group’s Board of Directors and of each Committee of the Board held during the year ended
30 June 2024, and the number of meetings attended by each Director were:
Audit, Risk and
Full meetings of the
Compliance
Investment
Nomination
Remuneration and
Board of Directors
Committee
Committee
Committee
HR Committee
A
B
A
B
A
B
A
B
A
B
D Clarke
8
8
4
5
3
3
1
1
*
*
J Chow
8
8
5
5
*
*
1
1
*
*
S Conry
8
8
*
*
3
3
*
*
5
5
D Harrison
7
8
*
*
*
*
*
*
*
*
K Moses
8
8
5
5
*
*
1
1
5
5
G Paramor
7
8
*
*
3
3
1
1
5
5
D Ross
8
8
5
5
3
3
*
*
5
5
*
Not a member of the stated Committee.
A = Number of meetings attended.
B = Number of meetings held during the time the Director held office or was a member of the stated Committee during the year.
Information on Directors continued
David Harrison
Managing Director and Group CEO
Experience and expertise
David has over 30 years' property market experience across
office, retail and industrial sectors in multiple geographies
globally.
As Charter Hall's Managing Director and Group Chief Executive
Officer, David is responsible for strategically growing the business
and maintaining its position as a multi-core sector market leader.
David is an executive member of various Fund Boards and
Partnership Investment Committees, and Chair of the Executive
Property Valuation Committee and Executive Leadership
Committee.
David has overseen the growth of Charter Hall Group from being
a small fund manager with $500 million of assets under
management when it listed on the ASX in 2005, to today being
the largest diversified property funds manager in Australia.
David remains driven to achieve excellence and create a positive
impact – giving back to the communities that Charter Hall
operates in, and protecting and growing the retirement savings of
those invested either directly or indirectly in the company –
ensuring every one of Charter Hall’s stakeholders benefits
through the firm’s integrity, discipline and ability to add more
value.
David is the Chair of the Property Council of Australia
Nominations and Financial Management Committees. He is also
a member of the Property Council Australia Champions of
Change Coalition.
David holds a Bachelor of Business in Land Economy from the
University of Western Sydney, is a Fellow of the Australian
Property Institute (FAPI) and holds a Graduate Diploma in
Applied Finance from the Securities Institute of Australia.
Other current listed company directorships
Charter Hall Retail REIT
Charter Hall Long WALE REIT
Charter Hall Social Infrastructure REIT (Alternative Director)
Former listed company directorships in last three years
Nil
Special responsibilities as at 30 June 2024
Member of the Investment Committee
Interests in securities
327,026 stapled securities in Charter Hall Group via direct
interests and 841,773 stapled securities in Charter Hall Group via
indirect interests.
David also holds 1,016,515 performance rights, 905,776
performance rights (ROP), 124,100 service rights in the Charter
Hall Performance Rights and Options Plan, as well as 284,911
STI Service Rights.
Total 3,500,101 securities and rights
Karen Moses
Independent Non-Executive Director
Experience and expertise
Karen joined the Board of Charter Hall Group on 1 September
2016 and was appointed Chair of the Audit, Risk and Compliance
Committee on 9 November 2016.
Karen has over 30 years’ corporate experience in the energy
industry spanning oil, gas, electricity and coal commodities,
gaining her experience both within Australia and overseas. During
her executive career, Karen was a senior executive at Origin
Energy in roles including Executive Director, Finance and
Strategy and Chief Operating Officer.
Karen holds a Bachelor of Economics and a Diploma of
Education from the University of Sydney.
Other current listed company directorships
Orica Ltd
Former listed company directorships in last three years
Boral Limited (Resigned 26th October 2024, Delisted 5th July
2024)
Special responsibilities as at 30 June 2024
Chair of the Audit, Risk and Compliance Committee
Member of the Nominations Committee
Member of the Remuneration and Human Resources Committee
Interests in securities
23,137 stapled securities in Charter Hall Group via indirect
interests
Greg Paramor AO
Independent Non-Executive Director
Experience and expertise
Greg joined the Board of the Charter Hall Group on 30 November
2018.
Greg has been in the real estate and funds management industry
for more than 40 years, and was the co-founder of Equity Real
Estate Partners, Growth Equities Mutual, Paladin Australia and
the James Fielding Group.
Greg was the CEO of Mirvac Group between 2004 and 2008.
Greg is a past president of the Property Council of Australia and
past president of Investment Funds Association, a Fellow of the
Australian Property Institute and The Royal Institute of Chartered
Surveyors. Greg is a board member of the Sydney Swans, the
Sydney Swans Foundation and Eureka Group Holdings Limited.
Greg was awarded an Officer in the General Division (AO) of the
Order of Australia in January 2015 for his distinguished service to
the community through executive roles in a range of fields,
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For FY24, there were no material changes to the remuneration structure at Charter Hall.
Non-Executive Director (NED) fees were increased by 3.5% effective 1 July 2023.
More details
Additional information on our operating conditions and business achievements is provided in the Chair and Managing Director
messages in the FY24 Annual Report.
Further details on the outcomes contained in this letter can be found in this report as follows:
- FY24 STI performance and remuneration outcomes – section 6.4
- FY21 LTI – section 6.8
- Key Management Personnel (KMP) remuneration – sections 2 and 6.2
- NED Fees – section 8
The Board will continue to monitor Charter Hall’s performance and remuneration policies and framework to ensure they remain fit for
purpose, drive the right behaviours, deliver on the intended strategy and meet securityholder expectations. We welcome your
feedback on Charter Hall’s remuneration framework and practices and look forward to your continued support at our 2024 Annual
General Meeting.
Stephen Conry AM
Chair – Remuneration and Human Resources Committee
David Clarke
Chair – Board
Remuneration Report
Dear Securityholders,
We are pleased to present this Remuneration Report for Charter Hall on behalf of the Board. The report details the Group’s executive
remuneration strategy and outcomes, aligned to Charter Hall's operating performance for the financial year ended 30 June 2024
(FY24).
During the year, Charter Hall continued to navigate the challenging economic landscape with higher interest rates and bond yields
impacting commercial property markets. Despite these industry-wide challenges, the underlying health of our business including our
strategy, operating model, and investor and tenant customer relationships remains strong. This has enabled us to achieve the targets
we set for FY24 and is largely the result of a focus on controlling our cost base, maintaining high occupancy rates and ensuring high
quality assets within our portfolio. Our commitment to the sustainability of our portfolio remains resolute, with significant progress
made in the decarbonisation of the Group. These efforts, combined with our culture of engagement and experience-based
development, have allowed us to retain top talent, positioning us well for when the property market emerges from the current
challenging phase of the market cycle.
FY24 performance and remuneration outcomes
The Group achieved an Operating Earnings Per Security (OEPS) result of 75.8 cents per security for FY24. While this was down on
FY23 (due largely to the higher performance fees earned in FY23), it was the third-highest OEPS result in Charter Hall’s history.
Excluding performance and transaction fees, it is the second-highest result, only slightly below FY23 demonstrating the Group’s
ability to improve margins in a challenging environment.
Throughout the year, our people continued to show remarkable dedication and resilience, focusing on the key workstreams we
identified to enable us to stay close to our customers, navigate market conditions successfully and do more with less. Some
highlights include:
- Strong tenant customer results across Retail, Office, Industrial & Logistics and Social Infrastructure with a weighted Net Promoter
Score (NPS) of +52;
- Industry-leading tenant occupancy rates in Retail (98%), Social Infrastructure (100%), Industrial & Logistics (99.5%) and Office
(96%);
- 89% Employee Engagement score, 9 points above the Australian norm with a 95% participation rate;
- AFR BOSS Most Innovative Property, Construction and Transport Company in 2023, the second consecutive year;
- Innovate RAP status endorsed by Reconciliation Australia;
- Silver status in the annual Pride in Diversity Australian Workplace Equality (AWEI) Index in 2024;
- 68% reduction in absolute carbon emissions (Scope 1 and Scope 2) against the FY17 baseline year;
- 3,766 volunteering hours, representing an 11% increase in volunteering from FY23.
Based on an assessment of the Group’s overall performance 100% of the target Short Term Incentive (STI) amount was made
available to award eligible employees based on team and individual performance outcomes.
The Managing Director & Group CEO’s (Managing Director) KPI outcomes met/exceeded the targets for the FY24 period. As a result,
his STI payment is 100% of his STI target. Other Reported Executives have been awarded an STI payout at 100% of their STI target.
On 31 August, 93.75% of the FY21 Long Term Incentive (LTI) will vest based on the following performance against the two
measures:
- Aggregate OEPS – this was equivalent to a 19.8% pa compound average growth rate (CAGR) over the four-year performance
period exceeding the stretch hurdle, and vesting in full and;
- Relative Total Shareholder Return (TSR) – a TSR of 36.72% (an equivalent CAGR of 8.1%) which will result in 87.5% of this
component vesting.
Changes to FY24 total remuneration
During the year, the Board reviewed KMP remuneration in the context of industry-wide executive leadership changes and the
requirement to maintain continuity during a challenging market cycle. Following a talent retention risk assessment and a market
salary benchmarking exercise, the following changes were made effective 1 July 2023:
- Sean McMahon (CIO) received an increase in total target remuneration to $3,200,000
- Russell Proutt (former CFO) received an increase in total target remuneration to $3,000,000
Details of other KMP remuneration during FY24 include:
- David Harrison (Managing Director) received no changes to remuneration;
- Anastasia Clarke (CFO) was appointed 29 January 2024, at a total target remuneration of $3,000,000. This followed the departure
of Russell Proutt on 29 February 2024.
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2.
FY24 Remuneration outcome summary and framework changes at a glance
Charter Hall Limited is pleased to present its Remuneration Report for the year ended 30 June 2024 (FY24). The table below outlines
the FY24 outcomes and key remuneration framework changes.
Component
Section
Outcomes/Remuneration Framework Changes
Total Target
Remuneration (TTR)
6.2
There were no changes to the TTR for the Managing Director during FY24.
There were increases in the TTR during FY24 for the CIO and former CFO of 11.4% and 11.7%
respectively. More information on the rationale for the increases can be found in section 6.2.
Fixed Annual
Remuneration (FAR)
6.3
There were no changes to FAR for the Managing Director during FY24.
There were increases to FAR during FY24 for the CIO and the former CFO of 8.1% and 4.0%
respectively. More information on the rationale for the increases can be found in section 6.2.
Short Term Incentive
(STI)
6.4
There were no changes to the STI target for the Managing Director during FY24.
There were increases to the STI target during FY24 for the CIO and the former CFO of 7.6%
and 9.9% respectively. More information on the rationale for the increases can be found in
section 6.2.
Group OEPS was 75.8 cents, which was 1.8% above the target FY24 OEPS. Assessment of
individual performance scorecards has resulted in 100% of the aggregate target STI at Group
level being awarded to eligible employees across the Group. For all Group Executives
(including the Reported Executives), STI is delivered in the form of cash (67%) and deferred
service rights (33%). The Managing Director and Other Reported Executives KPI performance
and STI outcomes are provided in section 6.4.
Long Term Incentive
(LTI)
6.8
The FY21 LTI grant reached the end of its four-year performance period on 30 June 2024. As a
result of performance exceeding the stretch hurdle for the aggregate OEPS measure (50% of
the LTI) this component will fully vest and with the Relative TSR measure (50% of LTI) outcome
at the 68.75th percentile of its comparator group 87.5% of this component will vest. On a
combined basis, 93.75% of the LTI will vest on 31 August 2024.
NED Fees
8
NED Board base and Committee fees were increased by 3.5% in FY24.
1.
Key Management Personnel
This Report outlines the remuneration policies and practices that apply to Charter Hall’s KMP for the year ended 30 June 2024. The
KMP include the Non-Executive Directors, Managing Director and Other Reported Executives.
Name
Role
Term as KMP
Non-Executive Directors
David Clarke
Chair
Full year
Jacqueline Chow
Director
Full year
Stephen Conry AM
Director
Full year
Karen Moses
Director
Full year
Greg Paramor AO
Director
Full year
David Ross
Director
Full year
Managing Director
David Harrison
Managing Director and Group CEO
Full year
Other Reported Executives
Anastasia Clarke
Chief Financial Officer (CFO)
Part year – appointed 29 January 2024
Sean McMahon
Chief Investment Officer (CIO)
Full year
Former Reported Executive
Russell Proutt
Chief Financial Officer
Part year – ceased employment 29
February 2024
The Report has been prepared and audited in accordance with the requirements of the Corporations Act 2001 (Cth) (Act).
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4.
FY25 Summary of remuneration framework changes at a glance
The are no proposed changes to the remuneration framework planned for FY25.
5.
Remuneration governance
Charter Hall’s Board and the Remuneration and Human Resources Committee (the Committee) are responsible for overseeing the
remuneration policy for the Group. The following diagram illustrates Charter Hall’s remuneration governance framework.
Specific responsibilities of the Board and the Committee are detailed in their respective Charters which are available on the Group
website at www.charterhall.com.au.
Managing Director and Management
The Managing Director makes recommendations to the Committee regarding Executives’ remuneration. These
recommendations consider performance, culture and values.
The Managing Director’s remuneration is considered separately to manage conflicts of interest.
SECURITYHOLDERS
Risk Management
The Committee has access to the
Group’s personnel including
those in the Risk, Finance and
People teams. The Committee
considers updates from these
teams, External and Internal
Audit and other Board
Committees, on relevant risk
matters, including remuneration
outcomes, adjustments, and
alignment of remuneration with
our strategy, values, risk appetite
and expected standards of
conduct.
Risk is also managed at various
points in the executive
remuneration framework
including throughout the
performance management
process and ultimately through
Board and Committee
intervention as and when
required.
External Advisors
The Board and the Committee
may seek advice from
independent experts and
advisors.
The Committee independently
appoints its remuneration
consultants and external
advisors and engages with them
in a manner which ensures that
any information provided is not
subject to undue influence by
management.
Remuneration and Human Resources
Committee
Members
- Stephen Conry AM (Chair)
- Karen Moses
- Greg Paramor AO
- David Ross
Role
Oversees our remuneration philosophy
while considering strategic objectives,
culture and values, risk management
framework and long-term financial
sustainability.
Reviews and provides guidance and, as
appropriate, endorses management
recommendations on remuneration
matters (including FAR, STI, LTI and
termination arrangements for Executives),
fees for the NEDs (of both Group and the
Fund Boards) and submits these for
Board approval.
Charter
Specific responsibilities are detailed in the
Committee’s Charter and reviewed
annually.
BOARD
The Board reviews, challenges and approves the recommendations of the Committee around policy, performance, the
remuneration arrangements for the Managing Director and the Executive Committee members (together ‘Executives’) and
Non-Executive Directors (NEDs) and the remuneration policies and processes for the wider Group.
3.
FY24 Actual remuneration received
Below is the table displaying the actual remuneration received by Reported Executives for the fiscal year ending on 30 June 2024. This
voluntary disclosure is provided to increase transparency and includes:
- Fixed pay and other benefits for FY24
- FY23 cash STI paid during FY24
- The value of any past LTI and STI award that vested and were exercised during FY24.
The actual remuneration presented in the table below is distinct from the disclosed remuneration (as required by section 308(C) of the
Corporations Act 2001 (Cth) (Act)) in section 7.1 of this Report, which is calculated in accordance with statutory obligations and
accounting standards. The numbers in section 7.1 include accounting values for current and prior years’ LTI grants that have not been
(or may not be) received, as they are dependent on performance hurdles and service conditions being met.
The STI in the table below is representative of what was paid in FY24 in cash, for FY23 performance. R Proutt elected to voluntarily
defer 50% of the $732,799 cash component of his FY23 STI into rights.
% of
Value of
remuneration
Salary
securities
consisting of
and other
Short Term
vested and
vested and
benefits1
Incentive2
exercised3
Totalexercised rights
Name
$
$
$
$
%
Managing Director
D Harrison
1,500,812
1,657,500
2,802,292
5,960,604
47.0
Other Reported Executives
A Clarke4
406,501
–
406,501
–
S McMahon
1,000,812
783,629
1,112,217
2,896,658
38.4
Former Reported Executive
R Proutt5
600,379
366,410
1,399,099
2,365,888
59.1
Totals
3,508,504
2,807,539
5,313,608
11,629,651
45.7
1
Other benefits include superannuation and non-monetary benefits.
2
Values relate to STI paid in FY24 in cash for FY23 performance. R Proutt elected to voluntarily defer 50% of the cash component of his FY23 STI into rights.
3
Values calculated using the closing share price of $10.84 on the vesting date applied to the number of rights that vested and were exercised for the FY20 LTI
performance rights (Tranche2), the FY21 STI T2 deferred service rights, the FY22 STI T1 deferred service rights, FY20 STI T3 voluntary deferred service rights and
FY23 STI voluntarily deferred service rights. A closing share price of $10.37 was used to calculate the value of the FY23 STI voluntary deferred service rights. The value
at the vesting date includes the change in the price of Charter Hall securities since the grant of the rights which were based upon independent valuations at the time.
4
A Clarke commenced on 29 January 2024, remuneration is pro-rata for this period.
5
R Proutt ceased employment on 29 February 2024, remuneration shows actual remuneration whilst employed.
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Remuneration Report
6.2 Remuneration mix
FY24 Total Target Remuneration (TTR)
1
A Clarke commenced on 29 January 2024, remuneration is shown as annualised full time equivalent. A Clarke did not receive a pro-rated LTI grant in FY24.
2
R Proutt ceased employment on 29 February 2024, remuneration is shown as annualised full time equivalent.
The figures below for all Reported Executives show the percentage mix of fixed versus ‘at-risk’ remuneration components on target that
applied for FY24. All Reported Executives have the potential to earn up to 150% of target STI.
21.5%
31.3%
31.7%
23.7%
22.9%
22.8%
11.9%
11.5%
11.4%
42.9%
34.4%
34.2%
CEO Target
CIO Target
CFO Target
FAR
STI (Cash)
STI (Deferred Rights)
LTI
Executive remuneration is structured as a mixture of fixed and variable ‘at-risk’ STI and LTI components. While fixed annual
remuneration is designed to provide a base level of remuneration, the ‘at-risk’ STI and LTI components reward executives when pre-
agreed performance measures are met or exceeded.
The FY24 remuneration for the Managing Director and Other Reported Executives is shown below. There were no changes to TTR for
the Managing Director during FY24. The Managing Director’s TTR is targeted at the upper quartile of comparable companies and roles
in the ASX-listed REIT sector consistent with Charter Hall’s competitive market position.
There were increases in TTR during FY24 for our CIO and former CFO of 11.4% and 11.7% respectively. The Board determined the
increases were reasonable against the highly competitive landscape, with careful consideration of the industry-wide leadership
changes and the risk of poaching activity. In both instances, the percentage of TTR in ‘at risk’ components increased, ensuring a strong
Fixed Annual
Remuneration
(FAR)
Short Term
Incentive (STI)
Long Term
Incentive (LTI)
Total Target
Remuneration
(TTR)
% of TTR in ‘at
risk’ components
Name
$
$
$
$
Managing Director
David Harrison
2024
1,500,000
2,486,250
3,000,000
6,986,250
78.5%
2023
1,500,000
2,486,250
3,000,000
6,986,250
78.5%
Other Reported Executives
Anastasia Clarke1
2024
950,000
1,025,000
1,025,000
3,000,000
68.3%
2023
-
-
-
-
-
Sean McMahon
2024
1,000,000
1,100,000
1,100,000
3,200,000
68.8%
2023
925,000
1,022,125
925,000
2,872,125
67.8%
Former Reported Executive
Russell Proutt 2
2024
900,000
1,050,000
1,050,000
3,000,000
70.0%
2023
865,000
955,825
865,000
2,685,825
67.8%
6.
Executive remuneration framework
Charter Hall’s remuneration framework is designed to attract and retain talented people by rewarding them for achieving performance
outcomes that are aligned with our purpose, culture and values, business strategy, risk appetite and the long-term interests of our
investors, customers and securityholders.
6.1 Executive remuneration strategy
The below diagram illustrates the remuneration framework that applied to the Managing Director and Other Reported Executives in
FY24. It also outlines the link between Charter Hall’s business and remuneration framework.
OUR PURPOSE
We create better futures by bringing aspirations to life.
OUR VALUES
Active Partnership
We believe that
if everyone benefits, we benefit
Genuine Insight
We use expertise to
unlock resilient growth
Inventive Spirit
We create with
purpose and discipline
Powered by Drive
We put our passion
into action
OUR BUSINESS STRATEGY
We use our expertise to access, deploy, manage and invest equity to create value and generate superior returns for our investor customers
through:
-
Optimising total return on invested capital;
-
Growing sustainable earnings and maintaining resilience via long WALE portfolios and through strong customer relationships;
-
Developing a scalable and efficient platform;
-
Recruiting, retaining and motivating a high performing team.
OUR REMUNERATION PRINCIPLES
Deliver long term results
for securityholders
Attract, retain and
motivate top talent
Be simple, transparent
and consistent
Drive appropriate risk culture
and employee conduct
Component
Delivery
Current Year
Year 1
Year 2
Year 3
Year 4
FAR
Fixed Annual Remuneration comprises of cash
base salary, statutory superannuation contributions
and other nominated benefits.
STI
‘At risk’ and subject to performance outcomes
against financial and non-financial KPIs including
evidence of behaviour in line with values.
LTI
‘At risk’ equity awards that are subject to long-term
performance conditions.
100% is delivered as Performance Rights.
Mandatory
Securityholding
Requirement1
The Managing Director must accumulate Charter Hall securities equal to 150% of pre-tax FAR and other Reported
Executives 100% of pre-tax FAR within five years of appointment in the role or from the date of adoption of the policy,
whichever is later, and maintain it on an on-going basis. The value of securities for determining compliance is the higher
of either cost or market value.
FY22 RETENTION AND OUTPERFORMANCE PLAN (one-off)1
Performance
Period (FY)
2022
2023
2024
2025
2026
2027
2028
Vesting
period and
holding lock
1 For further information regarding the FY22 Retention and Outperformance Plan, including more detail on the Plan terms, refer to
section 6.9 of the FY22 Remuneration Report.
33% STI deferred as
service rights vesting
in two equal tranches
over two years
67% STI
delivered
as cash
Vesting after four years, equal measures of
Relative TSR and aggregate OEPS
performance conditions
Five-year performance period commencing 1 July 2021 and ending 30 June
2026. Vesting is subject to meeting the:
- Financial – gateway Relative TSR and Absolute TSR performance measures
- Non-financial – gateway individual performance expectations and behaviour
consistent with the Group’s purpose and values, to the Board’s satisfaction
Securities allocated on
vesting remain subject to
a two-year holding lock until
30 June 2028
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Features
Approach
Determining and
assessing
performance
In consultation with the Committee, the Board assesses the Group’s financial performance and the
performance of all Reported Executives against agreed KPIs.
The Board applies the following general principles when determining and measuring performance goals
and any STI incentive for the Executives:
- STI outcomes should always align with the market reported results, with any adjustments being
consistent with business performance and behaviour aligned to Group values;
- ‘On target’ performance aligns with the Board approved target for the financial year;
- Payout above gateway for STI is up to a maximum (150% of STI target).
These principles for assessing performance were chosen because they are, as far as practicable,
objective and fair and the most appropriate way to assess the Executives’ individual contribution and
determine remuneration outcomes in alignment with the financial performance of the Group.
Board discretion
Once the balanced scorecard has been assessed and performance against KPIs has been determined,
the outcome is subject to Board discretion. The Board may modify the performance outcomes upwards or
downwards taking into account risk-related matters, behaviour in line with values and expected standards
of conduct.
Delivery
For all Executives, STI is delivered in the form of cash (67%) and deferred service rights (33%). Service
rights are deferred over two years with 50% vesting at the end of year one and 50% at the end of year
two. Effective for grants from 1 July 2023, participants have the right to elect the timing of exercise of
rights that vest for a period of up to 10 years from the initial grant date.
Voluntary deferral of
cash component of
STI
Under the FY24 STI Plan Executives and certain senior managers had an option to elect to receive up to
100% of their cash STI payment in the form of rights to acquire CHC securities. Effective for grants of
rights from 1 July 2023, participants have the right to elect the timing of the exercise of rights for a period
of up to 10 years from the initial grant date. These rights will be subject to Charter Hall’s Performance
Rights and Options Plan (PROP) however, will not be subject to performance conditions or forfeiture on
termination of employment.
Rights allocation
methodology
The methodology to determine the number of mandatorily deferred STI service rights and rights for the
voluntarily deferred component of cash STI, allocated under the PROP plan, will be on a face value basis,
calculated on the VWAP for the month of June 2024.
For rights granted from 1 July 2022 onwards, a cash payment equivalent to cash distributions declared
and paid to the securityholders during the period from the grant date to the date of exercise of the rights
following vesting will be paid to the participants on exercise of the rights. This will only be payable on the
rights that vest.
Cessation of
employment
In the event of resignation (other than genuine retirement) or termination for cause or for poor
performance (as determined by the Board), all unvested mandatorily deferred STI in service rights will
lapse, unless the Board determines otherwise. In any other circumstances unless the Board determines
otherwise, the rights will continue to remain on foot and, subject to the original terms of the offer, as
though the Executive had not ceased employment.
Preventing
inappropriate
benefits
For the mandatorily deferred STI component, the Board has the discretion to reduce, including to nil,
unvested rights in certain circumstances to ensure Executives do not obtain an inappropriate benefit. The
circumstances in which the Board may exercise this discretion include, for example, where the Board
determines that an Executive has acted fraudulently, dishonestly, or has engaged in gross misconduct or
has acted in a manner that brings the Group into disrepute.
Remuneration Report
6.3 Fixed Annual Remuneration
Composition
FAR comprises cash base salary, statutory superannuation contributions and other nominated benefits.
Benchmarking and
Review
The positioning of FAR for Executives (including Reported Executives) takes into account Charter Hall’s
FUM relative to the entities in the S&P/ASX 200 Australian Real Estate and Investment Trust (A-REIT)
industry group. Whilst market capitalisation relative to these companies is also considered, an
individual’s broad range of skills and experience are recognised given the complexity of Charter Hall’s
business.
FAR is reviewed regularly and benchmarked against equivalent roles in the market recognising
individual performance and the market environment for each individual’s skills and capabilities.
Comparator Group
The entities in the S&P/ASX 200 Australian Real Estate and Investment Trust (A-REIT) industry group
are included in the comparator Group used to determine the Reported Executives’ remuneration.
Charter Hall Managing
Director
The Managing Director’s FAR remained unchanged at $1,500,000 in FY24.
Other Reported
Executives
The CIO and former CFO received increases to FAR of 8.1% and 4.0% respectively in FY24.
6.4 Short Term Incentive
FY24 STI award – key features
Features
Approach
Purpose
STI is an ‘at-risk’ incentive awarded annually, subject to performance against agreed financial and non-
financial Key Performance Indicators (KPIs) including evidence of behaviour in line with values.
Participants
Executives
Gateway for STI
Group: A financial gateway of 95% of target OEPS must be met before any STI entitlement is available,
with the Board retaining overall discretion on performance achievement.
Individual: To help us maintain an effective risk management culture, all Executives must complete risk
and compliance training during the performance year (including Code of Conduct training) to ensure they
fully understand their role and comply with relevant legislative requirements.
Both gateways need to be met for any STI to be awarded.
Determining and
assessing
achievement of STI
target
The percentage achievement of STI target is determined by the Board, upon advice from the Committee,
based on actual OEPS achieved relative to an OEPS target. The Board retains the discretion to increase
or decrease the percentage of the overall STI target achieved, based on its assessment of the overall
performance throughout the year.
Individual
opportunity
The maximum STI potential for all employees is 150% of their STI target, enabling recognition for
outperformance.
Performance
targets
Individual STI outcomes are determined on the basis of Group and individual performance through a
balanced scorecard. The scorecard is split into three elements: Financial & Risk; Strategy & Customer;
and Leadership, Culture & Collaboration with 50% financial and 50% non-financial. For each of these
elements, there are KPIs aligned to our core strategic objectives of Growth and Resilience.
The Board believes that having a mix of financial and non-financial KPIs provides measurable
performance criteria strongly linked to year-on-year securityholder returns and encourages the
achievement of individual goals consistent with the Group’s overall objectives. The scorecard elements of
financial and risk, strategy and customer, and leadership, culture and collaboration have been chosen as
KPI categories because they represent important elements of Charter Hall’s core strategic objectives.
Each of these categories has measures of ‘Growth’ and ‘Resilience’.
Role
Financial & Risk
Strategy &
Customer
Leadership, Culture &
Collaboration
Managing Director
50%
30%
20%
CFO
50%
30%
20%
CIO
50%
25%
25%
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Remuneration Report
Strategy & Customer (30%)
Equity allotted is a measure of the funds’ inflow raised from investors in funds and partnerships and drives capacity to grow portfolios.
Progressing decarbonisation aligns with Charter Hall’s long term sustainability goals, with ESG being an extricable part of ‘how’ we do business.
Satisfied customers who receive above expectation service from the Group are most likely to become repeat business customers.
G/R
KPI (Strategy & Customer)
Weighting
Scorecard
result
Outcome
Growth
Group Fund & Partnership gross
equity allotted
10%
Exceeds
expectations
Gross equity allotted of $1.6 bn exceeded target.
Resilience
Key ESG initiatives progress
Progress decarbonisation of the group
10%
Exceeds
expectations
70% reduction in Scope 1 and 2 absolute emissions
reduction compared to FY17 baseline.
Three-year forward procurement of nature-based carbon
offsets.
Uplift of 23% in solar installed since FY23.
Investor & tenant customer
relationships
Listed and unlisted investor customer
confidence and advocacy
NPS scores
10%
Exceeds
expectations
Maintained high scores consistent with prior years.
Tenant customer survey weighted NPS result exceeded
target at +52 representing strong performance relative to
peers.
Leadership, Culture & Collaboration (20%)
Leadership capability for growth and scale is to develop and retain key talent to build a pipeline of future leaders.
Deep, diverse and engaged talent pipeline that results in higher retention and drives productivity resulting in better business performance.
G/R
KPI (Leadership, Culture &
Collaboration)
Weighting
Scorecard
result
Outcome
Growth
Leadership capability for growth
and scale
Succession plan progress
10%
Exceeds
expectations
Strong feedback from internal stakeholders, investors and
tenant customers on leadership capability and strategic
direction of the Group.
Resilience
Deep, diverse and engaged talent
pipeline
Role modelling leadership behaviours
10%
Exceeds
expectations
Female representation in Senior Management increased
to 36.96% as at 30 June 2024 up from 35.85% as at 30
June 2023.
Employee engagement was 89% (nine points above the
Australian norm) and Employee wellbeing was 86% (17
points above the Australian norm and 10 points above the
High Performing organisation norm).
Final Scorecard Outcome
After consideration of the performance of the Group and the Managing Director’s KPI performance outcomes, the Board awarded an
STI equivalent to 100% of STI target.
Remuneration Report
KPI Performance and STI outcome for financial year ending 30 June 2024 – Managing Director
Group Gateway
A financial gateway of 95% of target OEPS (74.5 cps) must be met before any STI
entitlement is available, with the Board retaining overall discretion on performance
achievement.
Achieved
Individual Gateway
Completion of risk and compliance training during the performance year (including Code
of Conduct training) to ensure they fully understand their role and comply with relevant
legislative requirements.
Fully met
Financial & Risk (50%)
Operating Earnings is a key measure of the financial performance of the Group in a financial year.
Fund and partnership property portfolio performance during the financial year compared to relevant benchmark measures whether fund
investors are satisfied that their investment performance meets or exceeds expectations, measured either against the funds return objective
or relevant benchmarks.
Risk Management is implemented at an acceptable level throughout the Group, measured by feedback from Investors and Board members.
G/R
KPI (Financial & Risk)
Weighting
Scorecard
result
Outcome
Growth
Group OEPS
Group OEPS (Target 74.5 cps)
Group OEPS after tax excluding
Performance Fees and STI
35%
Meets
expectations
Group OEPS of 75.8 cps which was 1.8% above target
OEPS.
Group OEPS after tax excluding Performance Fees and
STI was 3.1% above target.
Resilience
Performance of Funds &
Partnerships relative to agreed
benchmarks
10%
Does not meet
expectations
This was below our internal goal for funds and
partnerships that CHC co-invests in weighted by value,
relative to agreed benchmarks.
Risk management
5%
Meets
expectations
Commercial risk was well managed during the year with
strong leasing momentum, stable margins and FUM.
Broader risks were largely anticipated and controlled
although rising interest rates impacted fund investment
returns.
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Remuneration Report
Group FY24 performance outcomes
In FY24, Charter Hall’s OEPS was 75.8 cents, which was 18.8% below the FY23 OEPS, largely due to lower performance fees in FY24
compared to FY23. As can be seen in the table below, OEPS excluding Performance & Transaction fees has grown over the last four
years with a CAGR of 15.8% and with FY24 only slightly below FY23 despite the more difficult market conditions.
FY24 STI outcomes
Assessment of individual performance scorecards has resulted in 100% of the aggregate target STI
at Group level to be awarded, in September 2024, to eligible employees across the Group.
The below table shows the STI outcomes for Reported Executives for 2024.
The Managing Director received an STI payout at 100% of the STI target and the Other Reported
Executives received an STI payout at 100% of the target, for FY24. This is based on individual
achievement against KPIs including evidence of behaviour in line with values and overall leadership
team contribution to the Group.
Voluntary
Mandatory
deferral
Target
STI earned
STI earned
deferral into
into service
STI as % of compared to compared to
STI earned Paid in cash1
rights
rights
fixed pay
target
maximum
Name
$
$
$
$
%
%
%
Managing Director
D Harrison
2,486,250
-
1,657,500
828,750
166%
100%
66.7%
Other Reported Executives
A Clarke2
431,284
-
287,523
143,761
108%
100%
66.7%
S McMahon
1,100,000
733,333
-
366,667
110%
100%
66.7%
Former Reported Executive
R Proutt3
-
-
-
-
-
-
-
1 To be paid on 15 September 2024.
2 STI pro-rata for the period employed.
3 No STI payable following departure.
Remuneration Report
KPI performance and STI outcome for financial year ending 30 June 2024 – Other Reported Executives
KPIs for other Reported Executives are aligned to that of the Managing Director. These are focused on growth and resilience measures
in individual areas of accountability.
Scorecard
KPI
Anastasia Clarke
Performance Rating
Sean McMahon
Performance Rating
Financial & Risk
Including as relevant for each role: Group and
Divisional financial measures, fund investment
performance, transaction activity for funds and
partners, and risk management.
Meets/Exceeds
expectations
Meets expectations
Strategy & Customer
Including as relevant for each role: customer
experience, service and satisfaction measures, ESG
progress, Group treasury and liquidity management,
Group Fund & Partnership gross equity allotted and
divisional Funds under Management growth.
Meets/Exceeds
expectations
Exceeds
expectations
Leadership, Culture &
Collaboration
Including as relevant for each role: leadership
contribution, succession, talent, diversity, engagement
and wellbeing.
Meets/Exceeds
expectations
Meets/Exceeds
expectations
Final scorecard outcomes for Other Reported Executives
After consideration of the performance of the Group and the Other Reported Executives’ KPI performance outcomes, the Board
awarded an STI equivalent to 100% of the STI target.
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Remuneration Report
Relative TSR
Performance
Measure (50% of
LTI Allocation)
Performance is determined based on the Group’s total ASX shareholder return (assuming distributions are
reinvested) ranking against the members of the comparator group over the performance measurement period.
The Board determines who is included in that comparator group and how the companies in that group are to
be treated.
The Board has determined the following comparator group for the FY24 LTI:
Abacus Property Group (ABP)
GPT Group (GPT)
Arena REIT No. 1 (ARF)
Growthpoint Properties Australia (GOZ)
BWP Trust (BWP)
Home Consortium Ltd (HMC)
Centuria Capital Group (CNI)
Homeco Daily Needs REIT (HDN)
Centuria Industrial REIT (CIP)
Ingenia Communities Group (INA)
Charter Hall Group (CHC)
Mirvac Group (MGR)
Charter Hall Long Wale REIT (CLW)
National Storage REIT (NSR)
Charter Hall Retail REIT (CQR)
Region Group (RGN)
Charter Hall Social Infrastructure REIT (CQE)
Scentre Group (SCG)
Cromwell Property Group (CMW)
Stockland (SGP)
Dexus Property Group (DXS)
Vicinity Centres (VCX)
Goodman Group (GMG)
Waypoint REIT (WPR)
If, over the relevant performance period the Charter
Hall Group Relative TSR when ranked to a
comparator group of the S&P/ASX 200 A-REIT
Accumulation Index is:
Percentage of Performance Rights subject to the
Relative TSR performance measure which may
vest
Less than the comparator group 50th percentile
0%
Equal to the comparator group 50th percentile
25%
More than the comparator group 50th percentile
and less than 75th percentile
Pro rata straight line vesting between 25% - 50%
Exceeds the comparator group 75th percentile
50%
Rationale for
Performance
Measures
OEPS growth performance measure rationale
The aggregate OEPS performance measure was selected because it is within the Executive’s ability to
influence and is a key driver of securityholder returns and therefore aligns performance with returns to
securityholders. The Board excluded the CHOT performance fee from the aggregate OEPS hurdles and
actual OEPS performance in the FY19, FY20 and FY21 LTI Plans, however, all other performance fees were
included. With the CHOT performance fee paid out in full in FY20 it was not required to be excluded in the
FY22 LTI Plan aggregate OEPS performance measure.
The OEPS growth rates used to set the aggregate OEPS performance hurdles are 5% per annum compound
for the minimum aggregate OEPS hurdle and 7% per annum compound for the stretch aggregate OEPS
hurdle and is regarded by the Board as a competitive growth rate “through the cycle” when compared to other
REITs in the ASX200 A-REIT Accumulation Index.
For AREITs that have been in the S&P ASX 200 AREIT accumulation index over three and five years
(excluding Charter Hall), the average and median OEPS growth over three and five years to 30 June 2023
was less than a 2.5% CAGR.
Based on the above historic OEPS growth within the comparator group an OEPS CAGR hurdle of at least 5%
over a four-year period requires top quartile performance.
Charter Hall has typically delivered aggregate OEPS growth in excess of the 5-7% CAGR range. This has
been achieved as a consequence of a strategy to build a property funds management business which has
been well executed by management. The Board believes that management should continue to be rewarded
when delivering an OEPS CAGR in excess of the majority of its peers. The Board does not believe that the
OEPS CAGR hurdle ranges should be changed rather that management should continue to be motivated and
incentivised to outperform its peers. As the OEPS CAGR hurdle range is “through the cycle” there may be
periods when achieving the hurdle growth rates is more difficult.
The aggregate OEPS performance measure was selected because Charter Hall’s OEPS can fluctuate due to
performance and transaction fee income, and the Board believes that aggregate OEPS allows for OEPS to be
considered over the entire four-year performance period.
Remuneration Report
6.5 Long Term Incentive
FY24 LTI plan – key features
Features
Approach
Purpose
LTI is ‘at risk’ and aligns with the long-term interests of securityholders and business performance. It also
plays an important role in employee retention.
Participants
Executives
Type of equity
awarded
The LTI is governed by the Performance Rights and Options Plan (PROP), under which rights to stapled
securities are granted to participants. Each performance right entitles the participant to one stapled security in
the Charter Hall Group for nil consideration at the time of vesting, subject to meeting the performance hurdles
outlined below.
Performance
period
Performance Rights are subject to a four-year performance period commencing on 1 July 2023 and ending on
30 June 2027.
Performance
Rights allocation
methodology
The number of rights granted to a participant in FY24 was determined based on the face value of Charter Hall
securities, calculated on the VWAP for the month of June prior to the grant date. This was a change from prior
years and better aligns with securityholders. The previous methodology was based on an independent value
calculated by Deloitte using the Black Scholes Merton valuation method, which discounted for
dividends/distributions forgone during the performance period. There was no discount for market risk.
Vesting
conditions
Performance Rights will vest subject to the satisfaction of the following performance conditions measured over
the performance period:
- 50% of Performance Rights are subject to an aggregate operating earnings per security (OEPS) growth
hurdle;
- 50% of Performance Rights are subject to a relative total securityholder return (TSR) hurdle.
OEPS growth
performance
measure (50% of
LTI allocation)
The OEPS growth performance measure involves setting an aggregate total value of OEPS to be earned over
the entire performance period. The aggregate OEPS performance measure has a minimum and stretch hurdle
set by growing the commencement year OEPS (i.e. the actual OEPS for the financial year end prior to the
performance period) by the OEPS growth rates of 5% per annum compound for the minimum aggregate
OEPS hurdle and 7% per annum compound for the stretch aggregate OEPS hurdle. For the FY24 LTI, the
Board set the commencement OEPS as the FY23 actual OEPS result of 93.3 cps (after tax).
If the aggregate OEPS achieved over the four-year
performance period is:
Percentage of Performance Rights subject to
the aggregate OEPS performance measure
which may vest
Less than an aggregate OEPS (after tax) of 422.2 cps
(based on a 5% CAGR)
0%
Equal to aggregate OEPS (after tax) of 422.2 cps
(based on a 5% CAGR)
25%
More than an aggregate OEPS (after tax) of 422.2 cps
(based on a 5% CAGR) but less than an aggregate
OEPS (after tax) of 443.2 cps (based on a 7% CAGR)
Pro rata straight line vesting between
25%-50%
Equal to or more than an aggregate OEPS (after tax)
of 443.2 cps (based on a 7% CAGR)
50%
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Remuneration Report
6.7 FY24 Group performance summary
The table below provides information on Charter Hall’s performance against key metrics over the last five years.
Key performance metrics
2020
2021
2022
2023
2024
Statutory (loss)/profit after tax for stapled securityholders ($m)
345.9
476.8
911.1
196.1
(222.1)
Statutory earnings per stapled security (EPS) (cents)
74.3
102.4
194.1
41.5
(47.0)
Operating earnings for stapled securityholders ($m)
322.8
284.3
542.8
441.2
358.7
Operating earnings per stapled security (cents)
69.3
61.0
115.6
93.3
75.8
Growth in OEPS %
46.3
(12.0)
89.5
(19.3)
(18.8)
Operating earnings per stapled security (ex CHOT performance fee) (cents)1
53.9
61.0
115.6
93.3
75.8
Growth in OEPS (ex CHOT performance fee) %
36.8
13.2
89.5
(19.3)
(18.8)
Distribution per stapled security (cents)
35.7
37.9
40.1
42.5
45.1
Stapled security price at 30 June ($)
9.69
15.52
10.83
10.71
11.18
CHC total securityholder return – Jul to Jun (%)
(7.4)
64.1
(28.3)
2.6
8.4
Total Funds Under Management ($bn)
40.5
52.3
79.9
87.4
80.9
Property Funds Under Management ($bn)2
40.5
52.3
65.6
71.9
65.5
1 No CHOT performance fee was recognised in FY21, FY22, FY23 and FY24.
2 Excluding Paradice Investment Management (PIM).
TSR for Charter Hall versus comparable indices is outlined below
Charter Hall has outperformed its peer group over the longer term. The following table compares the total securityholder return for
Charter Hall against various indices and time periods.
Annualised TSR (p.a. compound)
1 year
3 years
5 years
10 years
CHC1
8.4%
(7.2%)
3.9%
14.8%
S&P ASX 100
12.2%
7.1%
7.8%
8.3%
S&P ASX 200 A-REIT
24.6%
5.7%
4.4%
8.9%
MSCI World REITs
20.8%
7.4%
12.3%
NA
1 Source UBS.
6.8 Group LTI performance outcomes
OEPS (FY20 LTI Tranche 2) – the Group delivered aggregate OEPS of 323.8 cents (excluding Charter Hall Office Trust performance
fees) over the four years to 30 June 2023 (FY20 LTI performance period) equivalent to a 31.0% CAGR exceeding the upper end of the
performance hurdle aggregate OEPS of 187.18 cents based upon a 7% CAGR over four-year performance period.
Relative TSR (FY20 LTI Tranche 2) – The TSR for the four-year performance period to 30 June 2023 was 8.93% equivalent to a 2.2%
CAGR, achieving the seventh ranking (at the 62.5th percentile) of the 17 REITs in the comparator group from the S&P/ASX200 A-REIT
Accumulation Index.
OEPS (FY21) – the Group delivered aggregate OEPS of 345.7 cents (excluding Charter Hall Office Trust performance fees) over the
four years to 30 June 2024 (FY21 LTI performance period) equivalent to a 19.8% CAGR exceeding the upper end of the performance
hurdle aggregate OEPS of 256.3 cents based upon a 7% CAGR over the four-year performance period.
Relative TSR (FY21) – the TSR for the four-year performance period to 30 June 2024 was 36.72% equivalent to an 8.1% CAGR
achieving an outcome at the 68.75th percentile (ranking sixth rank among the 17 REITs) in the comparator group from the
S&P/ASX200 A-REIT Accumulation Index.
The following graphs illustrate the Group’s TSR compared with the comparator group’s 50th and 75th percentile for FY20 (Tranche 2)
and FY21 LTI performance periods.
Remuneration Report
Relative TSR performance measure rationale
TSR measures the overall returns that a company has provided for its securityholders, reflecting share price
movements and reinvestment of dividends over a specified period. Relative TSR is the most widely used LTI
performance measure used in Australia. It ensures that value is only delivered to participants if the investment
return received by CHC securityholders is sufficiently high relative to the investment returns provided by the
comparator group over the same period.
The comparator group for determining the relative TSR performance for the FY24 LTI Relative TSR measure
is comprised of the REITs included in the S&P/ASX 200 A-REIT Accumulation Index as at 1 July 2023. This
comparator group is regarded as sufficiently large enough and the most relevant comparator group as it
represents all the major REITs listed and categorised as REITs on the ASX.
Voluntary
restriction period
For Performance Rights allocations granted from 1 July 2023, participants have the right to elect the timing of
exercise of vested rights for a period of up to 10 years from the grant date. Following vesting of the
Performance Rights, the restricted stapled securities allocated to participants will not be subject to forfeiture
upon termination.
Distributions
For Performance Rights allocations granted from 1 July 2022, a cash payment equivalent to cash distributions
declared and paid to the securityholders during the period from the grant date to the date of exercise of the
Performance Rights following vesting will be paid to the participants. This will only be payable on the rights
that vest, once Performance Rights are exercised.
Cessation of
employment
In the event of resignation (other than genuine retirement) or termination for cause or termination for poor
performance, all unvested Performance Rights will lapse, unless the Board determines otherwise. In any other
circumstances unless the Board determines otherwise, the Performance Rights will continue to remain on foot
and, subject to the original terms of the offer, as though the Executive had not ceased employment.
Preventing
inappropriate
benefits
The Board has discretion to reduce, including to nil, unvested rights in certain circumstances to ensure
Executives do not obtain an inappropriate benefit. The circumstances in which the Board may exercise this
discretion include for example, if the Board determines that an Executive has acted fraudulently or dishonestly
or engaged in gross misconduct or has acted in a manner which brings the Group into disrepute.
6.6 Deferred STI and LTI rights awarded – additional terms and conditions
Deferred STI and LTI Awards are subject to some additional terms and conditions as per below:
The Board, in its absolute discretion, may determine the manner in which the rights will be dealt with,
including that some or all rights vest or lapse, where a change of control event is likely to occur.
Where there is an actual change of control event, unless the Board determines otherwise, all unvested
rights will vest on a pro rata basis (based on the proportion of the vesting period that has elapsed), and
all vested rights will be automatically exercised.
In accordance with the Corporations Act 2001, all participants are prohibited from hedging or otherwise
protecting the value of unvested stapled securities.
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70 Charter Hall Group Annual Report 2024 / Directors’ Report and Financial Report / Directors’ Report
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7.
Executive remuneration in detail
7.1 Total remuneration of Reported Executives
The following table details the total remuneration of the Reported Executives of the Group for FY23 and FY24.
Post-
employ-
Other
Termin-
ment
Security-based
long-term
ation
Short-term benefits
benefits
payments
benefits
benefits
Securities
Mandatory
options
% of total
Voluntarily
security-
and
remun-
Cash
Non-
deferred
based
perform-
Long
Termin-
eration
short-term
Annual monetary
Super-
short-term short-term
ance
service
ation
consisting
Salary
incentive
leave1
benefits2 annuation
incentive6
incentive6
rights
leave1
benefits
Total
of rights5
Name
$
$
$
$
$
$
$
$
$
$
$
%
Managing Director
D Harrison3
2024
1,472,601
–
(48,338)
812
27,399 1,598,735
799,367
3,969,225
(101,084)
–
7,718,717
82
2023
1,474,708 1,657,500
(84,807)
814
25,292
– 1,024,318
3,621,285
(34,326)
–
7,684,784
60
Other Reported Executives
A Clarke4
2024
394,445
–
32,286
342
11,714
277,325
53,817
772,072
–
–
1,542,001
72
2023
–
–
–
–
–
–
–
–
–
–
–
–
S McMahon
2024
972,601
733,333
60,719
812
27,399
–
353,668
1,264,053
26,421
–
3,439,006
47
2023
899,708
783,629
(74,712)
814
25,292
–
456,327
1,120,921
16,188
–
3,228,167
49
Former Reported Executive
R Proutt5
2024
581,734
–
10,623
379
18,266
–
(251,549) (2,008,068)
(90,097)
28,714
(1,709,998)
132
2023
839,708
366,400
(41,919)
814
25,292
344,324
421,620
1,078,904
15,138
–
3,050,281
60
Total 2024
3,421,381
733,333
55,290
2,345
84,778 1,876,060
955,303
3,997,282
(164,760)
28,714 10,989,726
62
Total 2023
3,214,124 2,807,529 (201,438)
2,442
75,876
344,324 1,902,265
5,821,110
(3,000)
– 13,963,232
58
1 Shows the movement in leave accruals for the year.
2 Non-monetary benefits for FY24 is salary continuance insurance.
3 D Harrison elected to voluntarily defer 100% of the cash component of his FY24 STI into rights.
4 A Clarke elected to voluntarily defer 100% of the cash component of her FY24 STI into rights.
5 R Proutt elected to voluntarily defer 50% of the cash component of his FY23 STI into rights. Negative values reflect the lapsing of rights.
6 Includes voluntarily deferred cash STI, mandatory security based STI and Securities options and Performance Rights.
7 The amounts included in the table above reflect the fair value of the mandatory deferred and voluntary deferred STI awards at the respective grant dates rather than the
June VWAP (‘face value’) used for allocation purposes. Total STI awards in FY24, based on allocation date, for each reported executive was: D. Harrison $2,486,250; A
Clarke $431,284; S. McMahon $1,100,000.
Remuneration Report
FY20 LTI - Tranche 2 performance period
FY21 LTI – performance period
Outcomes
‒
The FY20 Tranche 2 LTI, with a four-year vesting period had a vesting date of 31 August
2023. As a result of the aggregate OEPS and TSR performance achieved over the four
years to 30 June 2023, the aggregate OEPS stretch hurdle was exceeded and the relative
TSR performance hurdle achieved the 62.5th percentile, 87.5% of the performance rights
vested on 31 August 2023.
‒
The FY21 LTI, with a four-year vesting period has a vesting date of 31 August 2024. As a
result of the aggregate OEPS and TSR performance achieved over the four years to 30
June 2024, the aggregate OEPS and relative TSR stretch hurdles were exceeded, 93.75%
of the Performance Rights will vest on 31 August 2024.
‒
Further details of the terms of these awards are set out in the relevant prior year
remuneration reports.
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Minimum
shareholding
requirement
NEDs are required to hold a minimum of 100% of annual base director fees, excluding Committee
membership fees in CHC securities within three years of appointment as a NED or from the date of this
policy, whichever is the later and maintain it on an on-going basis.
The value of securities for determining compliance is the higher of either cost or market value.
7.2 Key terms of employment
The remuneration and other terms of employment for Reported Executives are formalised in employment contracts. Each of these
contracts provides for participation in the Group’s STI and LTI programs and payment of other benefits.
All Reported Executives’ contracts are ongoing in duration. The notice period for the Managing Director and Other Reported Executives
are summarised below:
Minimum Notice Period1
Name
Position
Employee
Charter Hall
Managing Director
David Harrison2
Managing Director and Group CEO
6 months
12 months
Other Reported Executives
Anastasia Clarke3
Chief Financial Officer
6 months
6 months
Sean McMahon
Chief Investment Officer
6 months
6 months
Former Reported Executives
Russell Proutt4
Chief Financial Officer
6 months
6 months
1
No notice period is required for termination by the Company for serious or wilful misconduct by the employee.
2
Where the Managing Director gives notice of his cessation of employment, he is entitled to a restraint payment of a maximum of six-months equivalent fixed
remuneration so long as he complies with the terms of his employment agreement for the period of six months following his cessation.
3
A Clarke commenced on 29 January 2024.
4
R Proutt ceased employment on 29 February 2024.
Other than as described above, the Reported Executives’ contracts do not provide for any termination benefits aside from payment in
lieu of notice (where applicable).
8.
Non-Executive Director remuneration
Policy
The Committee makes recommendations to the Board on the total level of remuneration of the Chair and
other Non-Executive Directors, including any additional fees payable to Directors for membership of Board
committees.
Benchmarking
Fees are set by reference to the following considerations:
‒ industry practice and best principles of corporate governance;
‒ responsibilities and risks attached to the role of NEDs;
‒ the time commitment expected of NEDs on Group matters;
‒ reference to fees paid to NEDs of other comparable companies.
NED fees are periodically reviewed and benchmarked against the market to ensure they remain in line with
general industry practice and reflect proper compensation for duties undertaken.
Fee framework
NED fees, including committee fees, are set by the Board within the aggregate amount of $2.0 million per
annum as approved by securityholders at the AGM in November 2021.
Under the current framework, NEDs, other than the Chair receive (inclusive of superannuation):
‒ Board base fee;
‒ Committee fees.
The Chair receives an all-inclusive fee.
NEDs are also entitled to be reimbursed for all business-related expenses, including travel on Charter Hall
business, incurred in the discharge of their duties in accordance with Charter Hall’s Constitution.
In accordance with principles of good corporate governance, NEDs do not receive any benefits upon
retirement under any retirement benefits schemes (other than statutory superannuation) and NEDs are not
eligible to participate in any of Charter Hall’s employee incentive schemes.
Remuneration
outcomes
The Chair, member and committee fees were increased by 3.5% in FY24. Further details are outlined in
section 8.1 below.
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9.
Additional disclosures
9.1 Securityholdings
Key management personnel securityholdings
Opening
Stapled
Rights and
Stapled
Closing
balance at
securities
options
securities
balance at
Name
1 Jul 2023
acquired
exercised
sold
30 Jun 2024
Directors of Charter Hall Limited
Ordinary stapled securities
D Clarke
49,875
-
-
-
49,875
J Chow
10,000
-
-
-
10,000
S Conry AM
16,000
11,775
-
-
27,775
K Moses
23,137
-
-
-
23,137
G Paramor AO
14,300
-
-
-
14,300
D Ross
17,500
-
-
-
17,500
Managing Director
D Harrison1
1,168,799
-
258,514
(258,514)
1,168,799
Other Reported Executives
A Clarke2
-
-
-
-
-
S McMahon
305,009
-
102,603
-
407,612
Former Reported Executives
R Proutt3
105,612
-
-
-
-
1
Opening balance restated.
2
A Clarke commenced on 29 January 2024.
3
R Proutt ceased employment on 29 February 2024. Refer to section 10 for rights exercised during employment.
9.2 Performance rights and option plan details
Performance rights and service rights outstanding under the PROP
Performance rights
Financial year of grant
Securities
Exercise price
Vesting conditions
2021
691,704
Nil
OEPS and relative performance criteria
2022
661,764
Nil
OEPS and relative performance criteria
2022
5,000,000
Nil
Performance conditions
2023
922,792
Nil
OEPS and relative performance criteria
2024
1,147,764
Nil
OEPS and relative performance criteria
Total performance rights outstanding
8,424,024
Service rights
Financial year of grant
Securities
Exercise price
Vesting conditions
2020
130,000
Nil
Service Conditions
2021
276,166
Nil
Voluntary Deferred STI
2022
307,514
Nil
Voluntary Deferred STI
2023
119,413
Nil
Service conditions - Deferred STI
2023
434,110
Nil
Voluntary Deferred STI
2023
12,909
Nil
Service Conditions
2024
204,914
Nil
Service conditions - Deferred STI
2024
157,728
Nil
Service Conditions
Total service rights outstanding
1,642,754
8.1 Changes to NED fees and maximum aggregate NED fee pool
A summary of the NED fees in FY23 and the increased fees in FY24 are set out below.
2024
2023
Summary of fee framework per annum
$
$
Board
Chair
495,713
478,950
Member
186,559
180,250
Audit Risk and Compliance Committee
Chair
58,633
56,650
Member
26,651
25,750
Remuneration and Human Resources Committee
Chair
42,642
41,200
Member
19,722
19,055
Nomination Committee
Chair
5,330
5,150
Member
5,330
5,150
Investment Committee
Chair
18,123
17,510
Member
12,793
12,360
8.2 Statutory NED remuneration for FY24
2024 fees
2023 fees
Non-Executive Director remuneration
$ $
Non-Executive Directors
D Clarke
495,713
478,950
J Chow
218,540
207,888
S Conry AM
219,073
85,807
K Moses
270,244
261,105
G Paramor AO1
391,080
225,147
D Ross
268,645
259,560
Total
1,863,295
1,518,457
1 Fees include those payable for his role on CHC Board and his role on a CH subsidiary Board.
The maximum aggregate NED fee pool is $2.0 million which was approved by securityholders at the 2021 AGM.
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76 Charter Hall Group Annual Report 2024 / Directors’ Report and Financial Report / Directors’ Report
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11. Other Transactions with KMP
There were no loans made, guaranteed or secured, directly or indirectly, by the Company and any of its subsidiaries to KMP or their
related parties during the year. There were no other transactions between the Company or any of its subsidiaries and any KMP or their
related parties during the year.
10. Appendix
Valuation model
The Black-Scholes-Merton methodology which discounts for dividends/distributions foregone (there is no discount for market risk) is
used for accounting purposes for non-market-based Performance Rights. The Monte Carlo method is used for accounting purposes for
market-based Performance Rights. The accounting value determined using a Monte Carlo simulation valuation is in accordance with
AASB 2.
Reported Executive rights – details by plan
Rights
Fair value
Rights
vested and
Rights
Fair value
to be
Rights held
granted
exercised
forfeited
Rights held
per right
expensed
at 1 July
during
during
during
at 30 June
Grant
at grant
Vesting
in future
Type of equity
2023
the year
the year
the year
2024
date
date ($)
date
years ($)1
Managing Director
D Harrison
LTI Performance Rights
113,705
-
99,492
14,213
-
25-Nov-19
7.01
31-Aug-23
-
LTI Performance Rights
265,737
-
-
-
265,737
26-Nov-20
10.33
31-Aug-24
109,894
ROP Performance Rights
905,776
-
-
-
905,776
11-Nov-21
5.86
31-Aug-26 2,223,786
LTI Performance Rights
218,594
-
-
-
218,594
14-Dec-21
18.52
31-Aug-25 1,132,127
LTI Performance Rights
258,198
-
-
-
258,198
17-Nov-22
11.83
31-Aug-26 1,586,607
LTI Performance Rights
-
273,986
-
-
273,986
07-Dec-23
8.70
31-Aug-27 1,808,343
STI Deferred Service Rights
84,918
-
84,918
-
-
01-Jul-20
8.83
31-Aug-23
-
STI Deferred Service Rights
91,263
-
-
-
91,263
01-Jul-20
8.22
31-Aug-25
-
STI Deferred Service Rights
25,692
-
25,692
-
-
27-Jul-21
15.27
31-Aug-23
-
STI Deferred Service Rights
48,412
-
48,412
-
-
29-Jul-22
12.74
31-Aug-23
-
STI Deferred Service Rights
48,412
-
-
-
48,412
29-Jul-22
12.74
31-Aug-24
-
STI Deferred Service Rights
96,824
-
-
-
96,824
29-Jul-22
12.74
31-Aug-24
-
STI Deferred Service Rights
96,824
-
-
-
96,824
29-Jul-22
12.74
31-Aug-25
-
STI Deferred Service Rights
-
37,844
-
-
37,844
16-Aug-23
10.29
31-Aug-24
-
STI Deferred Service Rights
-
37,844
-
-
37,844
16-Aug-23
10.29
31-Aug-25
-
Other Reported Executives
A Clarke
Sign On Rights
-
157,728
-
-
157,728
29-Jan-24
9.51
29-Jan-25 1,055,995
S McMahon
LTI Performance Rights
33,916
-
29,677
4,239
-
25-Nov-19
7.01
31-Aug-23
-
LTI Performance Rights
79,264
-
-
-
79,264
26-Nov-20
10.33
31-Aug-24
32,779
ROP Performance Rights
372,374
-
-
-
372,374
11-Nov-21
4.58
31-Aug-26
714,528
LTI Performance Rights
67,400
-
-
-
67,400
14-Dec-21
18.52
31-Aug-25
349,073
LTI Performance Rights
79,610
-
-
-
79,610
17-Nov-22
11.83
31-Aug-26
489,197
LTI Performance Rights
-
100,460
-
-
100,460
07-Dec-23
8.70
31-Aug-27
663,049
STI Deferred Service Rights
40,708
-
40,708
-
-
01-Jul-20
8.83
31-Aug-23
-
STI Deferred Service Rights
12,781
-
-
-
12,781
27-Jul-21
14.91
31-Aug-24
-
STI Deferred Service Rights
12,316
-
12,316
-
-
27-Jul-21
15.27
31-Aug-23
-
STI Deferred Service Rights
19,902
-
19,902
-
-
29-Jul-22
12.74
31-Aug-23
-
STI Deferred Service Rights
19,902
-
-
-
19,902
29-Jul-22
12.74
31-Aug-24
-
STI Deferred Service Rights
-
17,892
-
-
17,892
16-Aug-23
10.29
31-Aug-24
-
STI Deferred Service Rights
-
17,892
-
-
17,892
16-Aug-23
10.29
31-Aug-25
-
Former Reported Executives
R Proutt
LTI Performance Rights
35,633
-
31,179
4,454
-
25-Nov-19
7.01
31-Aug-23
-
LTI Performance Rights
83,276
-
-
83,276
-
26-Nov-20
10.33
31-Aug-24
-
ROP Performance Rights
348,220
-
-
348,220
-
11-Nov-21
5.86
31-Aug-26
-
LTI Performance Rights
63,028
-
-
63,028
-
14-Dec-21
18.52
31-Aug-25
-
LTI Performance Rights
74,446
-
-
74,446
-
17-Nov-22
11.83
31-Aug-26
-
STI Deferred Service Rights
36,288
-
36,288
-
-
01-Jul-20
8.83
31-Aug-23
-
STI Deferred Service Rights2
38,999
-
-
-
-
01-Jul-20
8.22
31-Aug-25
-
STI Deferred Service Rights2
45,574
-
-
-
-
27-Jul-21
15.63
31-Aug-24
-
STI Deferred Service Rights
10,979
-
10,979
-
-
27-Jul-21
12.74
31-Aug-23
-
STI Deferred Service Rights
18,611
-
18,611
-
-
29-Jul-22
12.74
31-Aug-23
-
STI Deferred Service Rights
18,611
-
-
18,611
-
29-Jul-22
12.74
31-Aug-24
-
STI Deferred Service Rights2
37,223
-
-
-
-
29-Jul-22
12.74
31-Aug-25
-
STI Deferred Service Rights
-
16,731
-
16,731
-
16-Aug-23
10.29
31-Aug-24
-
STI Deferred Service Rights
-
16,731
-
16,731
-
16-Aug-23
10.29
31-Aug-25
-
1
The maximum value of the grants yet to vest is the fair value amount at the grant date yet to be reflected in the Group's consolidated income statement. The minimum
future value is $nil as the future performance and service conditions may not be met.
2
Voluntary deferred service rights held at cessation of employment.
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78 Charter Hall Group Annual Report 2024 / Directors’ Report and Financial Report / Directors’ Report
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Environmental regulation
The Charter Hall Group recognises that sustainability is more
than protecting the natural environment; it is about responding to
the needs of our customers, achieving our long-term commercial
goals and working in partnership with our stakeholders to improve
environmental and social outcomes. Our approach focuses on
where and how we can make the most difference.
The Board has oversight of our sustainability strategy, policies,
risks and opportunities, including our approach to risks and
opportunities of a changing climate and the integration of ESG
into our systems. Our Group Sustainability Policy outlines our
commitments to achieving a sustainable future and can be found
at: www.charterhall.com.au/About-Us/corporate-
governance/corporate-governance-charter-hall-group.
The Group has processes in place to comply with applicable
environmental standards and regulations. The Group reports its
greenhouse gas emissions and energy use on an annual basis
under the National Greenhouse and Energy Reporting Act 2007,
as well as disclosing in our voluntary Annual Sustainability
Report, which can be found at:
https://www.charterhall.com.au/sustainability.
The Group is actively addressing and managing environmental
impacts to support the following outcomes:
Net Zero Carbon in operation for Scope 1 and Scope 2 by
2025, accelerating our commitment by 5 years
100% Renewable electricity powering our assets in
operational control by 2025
50% waste diversion from landfill by 2025
4.5 Star National Australian Built Environment Rating System
(NABERS) Water weighted average portfolio rating for Office
and Retail by 2030
5 Star NABERS Energy weighted average portfolio rating for
Office by 2025
4.5 Star NABERS Energy weighted average portfolio rating
for Retail by 2025
Charter Hall has a demonstrated track record in using
independent rating tools to benchmark and measure operational
performance of its property portfolios, including Green Star,
National Australian Built Environmental Rating System (NABERS)
and International WELL Building Standard (WELL).
Charter Hall voluntarily reports annually to international
organisations, such as the United Nations Principles for
Responsible Investment (PRI), Dow Jones Sustainability Index
(DJSI), and Global Real Estate Sustainability Benchmark
(GRESB). This year, the Group responded to the DJSI Reports
for CHC and GRESB Real Estate Assessment Reports for 28
funds representing $58.5 billion of FUM. Additionally, GRESB
Public Disclosure Statements were submitted for CLW, CQR,
CHC, and CQE.
Labour practices
Charter Hall Group became a signatory to the UN Global
Compact on 8 March 2019. Charter Hall’s Human Rights Policy
and Supplier Code of Conduct can be found at
www.charterhall.com.au/About-Us/corporate-
governance/corporate-governance-charter-hall-group. These
documents outline our commitment to manage our operations in
line with the UN Guiding Principles, the UN Global Compact and
international and Australian Modern Slavery legislation, reflecting
both our business needs and the expectations of our customers
and key stakeholders.
Tax Governance Statement
Charter Hall Group has adopted the Board of Taxation's Tax
Transparency Code (TTC) at 30 June 2017. As part of the TTC,
Charter Hall has published a Tax Governance Statement (TGS)
which details Charter Hall Group’s corporate structure and tax
corporate governance systems. Charter Hall Group’s TGS can be
found on our website at www.charterhall.com.au/about-
us/corporate-governance/corporate-governance-charter-hall-
group.
Proceedings on behalf of the Company
Section 237 of the Corporations Act 2001 allows for a person to
apply to the Court to bring proceedings on behalf of the
Company, or to intervene in any proceedings to which the
Company is a party, in certain circumstances.
No person has made such an application and no proceedings
have been brought or intervened in on behalf of the Company
with the Court.
Auditor’s independence declaration
A copy of the auditor’s independence declaration as required
under section 307C of the Corporations Act 2001 is set out on
page 82.
Rounding of amounts
The Company and the Trust is of a kind referred to in ASIC
Corporations Instrument (Rounding in Financial/Directors’
Reports) 2016/191, relating to the rounding off of amounts in the
Directors’ Report. Amounts in the Directors’ Report have been
rounded off in accordance with that instrument to the nearest
hundred thousand dollars, or in certain cases, to the nearest
dollar.
Directors’ authorisation
The Directors’ Report is made in accordance with a resolution of
the Directors. The Financial Statements were authorised for issue
by the Directors on 21 August 2024. The Directors have the
power to amend and re-issue the Financial Statements.
David Clarke
Chair
Sydney
21 August 2024
Directors’ report – continued
Indemnification and insurance of directors, officers and auditor
During the year, the Charter Hall Group contributed to the premium for a contract insuring all directors, secretaries, executive officers
and officers of the Charter Hall Group and of each related body corporate of the Group, with the balance of the premium paid by funds
managed by members of the Charter Hall Group. The insurance does not provide any cover for the independent auditor of the Charter
Hall Group or of a related party of the Charter Hall Group. In accordance with usual commercial practice, the insurance contract
prohibits disclosure of details of the nature of the liabilities covered by the insurance, the limit of indemnity and the amount of the
premium paid under the contract.
So long as the officers of the Responsible Entity act in accordance with the Charter Hall Property Trust’s constitution and the
Corporations Act 2001, the officers are indemnified out of the assets of the Charter Hall Property Trust against losses incurred while
acting on behalf of the Charter Hall Property Trust. The Charter Hall Group indemnifies the auditor (PricewaterhouseCoopers Australia)
against any liability (including legal costs) for third party claims arising from a breach by the Charter Hall Group of the auditor’s
engagement terms, except where prohibited by the Corporations Act 2001.
Non-audit services
The Company may decide to employ the auditor on assignments additional to its statutory audit duties where the auditor's expertise
and experience with the Group are important.
Details of the amounts paid or payable to the auditor (PricewaterhouseCoopers) for non-audit services provided during the year are set
out below.
The Board of Directors has considered the position and, in accordance with the advice received from the Audit, Risk and Compliance
Committee, is satisfied that the provision of the non-audit services is compatible with the general standard of independence for auditors
imposed by the Corporations Act 2001. The Directors are satisfied that the provision of non-audit services by the auditor, as set out
below, did not compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons:
‒
all non-audit services have been reviewed by the Audit, Risk and Compliance Committee to ensure they do not impact the
impartiality and objectivity of the auditor; and
‒
none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for
Professional Accountants.
During the year, the following fees were paid for non-audit services provided by the auditor and its related practices by the Charter Hall
Group and Charter Hall Property Trust Group:
Charter Hall Group
Charter Hall Property
Trust Group
2024
2023
2024
2023
$
$
$
$
PricewaterhouseCoopers – Australian Firm
Taxation compliance services
61,732
67,970
–
–
Total remuneration for taxation compliance services
61,732
67,970
–
–
Other services
PricewaterhouseCoopers – Australian Firm
Sustainability assurance services
252,000
160,000
–
–
Other assurance services
–
13,178
–
13,178
Total remuneration for other services
252,000
173,178
–
13,178
Total remuneration for non-audit services
313,732
241,148
–
13,178
81
80 Charter Hall Group Annual Report 2024 / Directors’ Report and Financial Report / Directors’ Report
Back to Contents
Charter Hall Group
Charter Hall Property
Trust Group
2024
2023
2024
2023
Note
$'m
$'m
$'m
$'m
Income
Revenue
4
597.8
869.7
25.0
21.8
Net gain on sale of investments
–
0.5
–
0.6
Other net fair value adjustments
–
0.7
–
4.2
Total income
597.8
870.9
25.0
26.6
Expenses
Share of net loss from equity accounted investments
2,3
(350.3)
(83.4)
(340.7)
(100.6)
Employee costs
5
(192.4)
(187.0)
–
–
Development costs
(15.7)
(193.0)
–
–
Administration and other expenses
5
(47.5)
(40.1)
(4.1)
(3.6)
Finance costs
(33.2)
(26.9)
(51.8)
(29.2)
Depreciation, amortisation and impairment
5
(60.4)
(17.8)
–
(9.1)
Other net fair value adjustments
(17.7)
–
–
–
Other net losses
(8.2)
(0.9)
(3.4)
–
Total expenses
(725.4)
(549.1)
(400.0)
(142.5)
Profit/(loss) before tax
(127.6)
321.8
(375.0)
(115.9)
Income tax expense
6
(94.5)
(125.7)
–
–
Profit/(loss) for the year
(222.1)
196.1
(375.0)
(115.9)
Profit/(loss) for the year attributable to:
Equity holders of Charter Hall Limited
152.9
312.0
–
–
Equity holders of Charter Hall Property Trust
(non-controlling interest)
(375.0)
(115.9)
(375.0)
(115.9)
Profit/(loss) attributable to stapled securityholders of
Charter Hall Group
(222.1)
196.1
(375.0)
(115.9)
Profit/(loss) for the year
(222.1)
196.1
(375.0)
(115.9)
PricewaterhouseCoopers, ABN 52 780 433 757
One International Towers Sydney, Watermans Quay, Barangaroo, GPO BOX 2650, SYDNEY NSW 2001
T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au
Level 11, 1PSQ, 169 Macquarie Street, Parramatta NSW 2150, PO Box 1155 Parramatta NSW 2124
T: +61 2 9659 2476, F: +61 2 8266 9999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
Auditor’s Independence Declaration
As lead auditor for the audit of Charter Hall Group and Charter Hall Property Trust Group for the year
ended 30 June 2024, I declare that to the best of my knowledge and belief, there have been:
(a)
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
(b)
no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Charter Hall Limited and the entities it controlled during the period and
Charter Hall Property Trust and the entities it controlled during the period (together referred to as
“Charter Hall Group”) and Charter Hall Property Trust and the entities it controlled during the period
(together referred to as “Charter Hall Property Trust Group”).
R W McMahon
Sydney
Partner
PricewaterhouseCoopers
21 August 2024
Consolidated Statements of Comprehensive Income
83
82 Charter Hall Group Annual Report 2024 / Directors’ Report and Financial Report / Auditor's Independence Declaration
Back to Contents
Charter Hall Group
Charter Hall Property
Trust Group
2024
2023
2024
2023
Note
$'m
$'m
$'m
$'m
Assets
Current assets
Cash and cash equivalents
382.7
401.4
22.4
56.1
Receivables and other assets
9
105.4
159.5
45.8
39.1
Development assets
1.1
29.0
–
–
Derivative financial instruments
15
4.1
4.8
2.7
4.8
Assets classified as held for sale
10
78.8
–
78.8
–
Total current assets
572.1
594.7
149.7
100.0
Non-current assets
Receivables and other assets
9
4.0
3.7
–
–
Derivative financial instruments
15
17.2
34.2
17.2
17.5
Financial assets at fair value through profit or loss
20.1
29.7
20.1
29.7
Investments accounted for at fair value through profit or loss
2,3
89.2
123.6
89.2
123.6
Development assets
32.5
76.3
–
–
Investments accounted for using the equity method
2,3
2,772.6
3,066.7
2,421.3
2,621.4
Intangible assets
11
113.0
113.5
–
–
Property, plant and equipment
10.4
14.1
–
–
Right-of-use assets
12.6
16.1
–
–
Total non-current assets
3,071.6
3,477.9
2,547.8
2,792.2
Total assets
3,643.7
4,072.6
2,697.5
2,892.2
Liabilities
Current liabilities
Trade and other liabilities
13
214.2
209.2
22.4
62.8
Development liabilities
7.8
13.3
–
–
Current tax liabilities
7.3
35.1
–
–
Lease liabilities
7.6
7.1
–
–
Liabilities associated with assets classified as held for sale
10
35.5
–
35.5
–
Total current liabilities
272.4
264.7
57.9
62.8
Non-current liabilities
Trade and other liabilities
13
5.0
4.7
396.6
143.8
Derivative financial instruments
15
38.2
41.1
38.2
41.1
Borrowings
14
455.5
450.7
455.5
450.7
Development liabilities
27.7
16.0
–
–
Lease liabilities
11.4
16.4
–
–
Deferred tax liabilities
12
12.9
23.8
–
–
Total non-current liabilities
550.7
552.7
890.3
635.6
Total liabilities
823.1
817.4
948.2
698.4
Net assets
2,820.6
3,255.2
1,749.3
2,193.8
Equity
Equity holders of Charter Hall Limited
Contributed equity
16(a)
315.0
314.8
–
–
Reserves
17
2.9
1.2
–
–
Accumulated profit
753.4
745.4
–
–
Parent entity interest
1,071.3
1,061.4
–
–
Equity holders of Charter Hall Property Trust
Contributed equity
16(a)
1,536.3
1,536.2
1,536.3
1,536.2
Reserves
17
2.4
3.7
2.4
3.7
Accumulated profit
210.6
653.9
210.6
653.9
Equity holders of Charter Hall Property Trust
(non-controlling interest)
1,749.3
2,193.8
1,749.3
2,193.8
Total equity
2,820.6
3,255.2
1,749.3
2,193.8
The above consolidated balance sheets should be read in conjunction with the accompanying notes.
Charter Hall Group
Charter Hall Property
Trust Group
2024
2023
2024
2023
Note
$'m
$'m
$'m
$'m
Profit/(loss) for the year
(222.1)
196.1
(375.0)
(115.9)
Other comprehensive income
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign operations
0.3
1.4
0.3
1.4
Changes in the fair value of cash flow hedges
(1.2)
(0.5)
(1.6)
(0.5)
Equity accounted fair value movements
0.2
(0.1)
–
–
Other comprehensive income/(loss) for the year
(0.7)
0.8
(1.3)
0.9
Total comprehensive income/(loss) for the year
(222.8)
196.9
(376.3)
(115.0)
Total comprehensive income/(loss) for the year is
attributable to:
Equity holders of Charter Hall Limited
153.5
311.9
–
–
Equity holders of Charter Hall Property Trust
(non-controlling interest)
(376.3)
(115.0)
(376.3)
(115.0)
Total comprehensive income/(loss) attributable to stapled
securityholders of Charter Hall Group
(222.8)
196.9
(376.3)
(115.0)
Total comprehensive income/(loss) for the year
(222.8)
196.9
(376.3)
(115.0)
Basic earnings per security (cents) attributable to:
Equity holders of Charter Hall Limited
32.3
66.0
n/a
n/a
Equity holders of Charter Hall Property Trust
(non-controlling interest)
(79.3)
(24.5)
(79.3)
(24.5)
Basic earnings per stapled security (cents) attributable to
stapled securityholders of Charter Hall Group
8(a)
(47.0)
41.5
n/a
n/a
Diluted earnings per security (cents) attributable to:
Equity holders of Charter Hall Limited
31.7
64.8
n/a
n/a
Equity holders of Charter Hall Property Trust
(non-controlling interest)
(77.7)
(24.1)
(77.7)
(24.1)
Diluted earnings per stapled security (cents) attributable to
stapled securityholders of Charter Hall Group
8(b)
(46.0)
40.7
n/a
n/a
The above consolidated statements of comprehensive income should be read in conjunction with the accompanying notes.
Consolidated Balance Sheets
85
84 Charter Hall Group Annual Report 2024 / Directors’ Report and Financial Report / Consolidated Statements of Comprehensive Income
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Attributable to the owners of the
Charter Hall Property Trust Group
Non-
Contributed
Accumulated
controlling
Total
equity
Reserves profit/(losses)
Total
interest
equity
Note
$'m
$'m
$'m
$'m
$'m
$'m
Balance at 1 July 2022
1,538.0
3.1
879.8
2,420.9
43.2
2,464.1
Loss for the year
–
–
(115.9)
(115.9)
–
(115.9)
Other comprehensive income
–
0.9
–
0.9
–
0.9
Total comprehensive income/(loss)
–
0.9
(115.9)
(115.0)
–
(115.0)
Transactions with equity holders in their
capacity as equity holders:
Buyback and issuance of securities for
exercised performance rights
(1.8)
–
–
(1.8)
–
(1.8)
Dividend/distribution provided for or paid
7
–
–
(110.5)
(110.5)
–
(110.5)
Loss of control of subsidiary
–
(0.3)
0.5
0.2
(43.2)
(43.0)
(1.8)
(0.3)
(110.0)
(112.1)
(43.2)
(155.3)
Balance at 30 June 2023
1,536.2
3.7
653.9
2,193.8
–
2,193.8
Balance at 1 July 2023
1,536.2
3.7
653.9
2,193.8
–
2,193.8
Loss for the year
–
–
(375.0)
(375.0)
–
(375.0)
Other comprehensive loss
–
(1.3)
–
(1.3)
–
(1.3)
Total comprehensive loss
–
(1.3)
(375.0)
(376.3)
–
(376.3)
Transactions with equity holders in their
capacity as equity holders:
Buyback and issuance of securities for
exercised performance rights
0.1
–
–
0.1
–
0.1
Dividend/distribution provided for or paid
7
–
–
(68.3)
(68.3)
–
(68.3)
0.1
–
(68.3)
(68.2)
–
(68.2)
Balance at 30 June 2024
1,536.3
2.4
210.6
1,749.3
–
1,749.3
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
Attributable to the owners of
Charter Hall Limited
Charter Hall
Group
Non-
Contributed
Accumulated
controlling
Total
equity
Reserves profit/(losses)
Total
interest
equity
Note
$'m
$'m
$'m
$'m
$'m
$'m
Balance at 1 July 2022
314.8
(13.3)
524.1
825.6
2,464.1
3,289.7
Profit/(loss) for the year
–
–
312.0
312.0
(115.9)
196.1
Other comprehensive income/(loss)
–
(0.1)
–
(0.1)
0.9
0.8
Total comprehensive income/(loss)
–
(0.1)
312.0
311.9
(115.0)
196.9
Transactions with equity holders in their
capacity as equity holders:
Buyback and issuance of securities for
exercised performance rights
(0.7)
(6.4)
–
(7.1)
(1.8)
(8.9)
Tax recognised direct to equity
6(c)
0.7
–
–
0.7
–
0.7
Transfer due to deferred compensation
payable in service rights
–
8.4
–
8.4
–
8.4
Security-based benefit expense
–
12.6
–
12.6
–
12.6
Dividend/distribution provided for or paid
7
–
–
(90.7)
(90.7)
(110.5)
(201.2)
Loss of control of subsidiary
–
–
–
–
(43.0)
(43.0)
–
14.6
(90.7)
(76.1)
(155.3)
(231.4)
Balance at 30 June 2023
314.8
1.2
745.4
1,061.4
2,193.8
3,255.2
Balance at 1 July 2023
314.8
1.2
745.4
1,061.4
2,193.8
3,255.2
Profit/(loss) for the year
–
–
152.9
152.9
(375.0)
(222.1)
Other comprehensive income/(loss)
–
0.6
–
0.6
(1.3)
(0.7)
Total comprehensive income/(loss)
–
0.6
152.9
153.5
(376.3)
(222.8)
Transactions with equity holders in their
capacity as equity holders:
Buyback and issuance of securities for
exercised performance rights
–
(12.5)
–
(12.5)
0.1
(12.4)
Tax recognised direct to equity
6(c)
0.2
(0.4)
–
(0.2)
–
(0.2)
Transfer due to deferred compensation
payable in service rights
–
(3.1)
–
(3.1)
–
(3.1)
Security-based benefit expense
–
17.1
–
17.1
–
17.1
Dividend/distribution provided for or paid
7
–
(144.9)
(144.9)
(68.3)
(213.2)
0.2
1.1
(144.9)
(143.6)
(68.2)
(211.8)
Balance at 30 June 2024
315.0
2.9
753.4
1,071.3
1,749.3
2,820.6
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
Consolidated Statement of Changes in Equity -
Charter Hall Group
Consolidated Statement of Changes in Equity -
Charter Hall Property Trust Group
87
86 Charter Hall Group Annual Report 2024 / Directors’ Report and Financial Report / Consolidated Statement of Changes in Equity - Charter Hall Group
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Charter Hall Group
Charter Hall Property
Trust Group
2024
2023
2024
2023
Note
$'m
$'m
$'m
$'m
Cash flows from operating activities
Receipts from customers (inclusive of GST)
762.7
890.7
14.7
21.8
Payments to suppliers and employees (inclusive of GST)
(308.3)
(520.0)
(5.7)
(1.8)
Tax paid
(133.4)
(165.5)
–
–
Interest received
13.5
11.3
1.4
2.1
Interest paid
(32.0)
(25.2)
(31.0)
(22.9)
Distributions and dividends from investments
125.5
147.6
95.6
110.1
Net cash inflow from operating activities
19
428.0
338.9
75.0
109.3
Cash flows from investing activities
Payments for property, plant and equipment
(2.5)
(2.3)
–
–
Payments for investment properties
(78.8)
–
(78.8)
–
Investments in associates, joint ventures and financial assets
(319.7)
(434.3)
(319.7)
(300.8)
Proceeds on disposal and return of capital from
investments in associates and joint ventures
145.0
115.5
131.8
91.9
Loans to associates, joint ventures and related parties
–
–
(53.8)
(64.6)
Repayments of loans from associates, joint ventures and related
parties
–
–
290.8
274.3
Net cash inflow/(outflow) from investing activities
(256.0)
(321.1)
(29.7)
0.8
Cash flows from financing activities
Buy back of stapled securities
(11.2)
(8.9)
–
–
Borrowing costs paid
(0.7)
–
(0.7)
–
Proceeds from borrowings (net of borrowing costs)
37.5
–
37.5
–
Repayment of borrowings
(2.0)
–
(2.0)
–
Principal elements of lease payments
(7.2)
(6.8)
–
–
Dividends/distributions paid to stapled securityholders
(207.1)
(195.4)
(113.8)
(107.4)
Net cash outflow from financing activities
(190.7)
(211.1)
(79.0)
(107.4)
Net increase/(decrease) in cash and cash equivalents
(18.7)
(193.3)
(33.7)
2.7
Cash and cash equivalents at the beginning of the year
401.4
594.7
56.1
53.4
Cash and cash equivalents at the end of the year
382.7
401.4
22.4
56.1
The above consolidated cash flow statements should be read in conjunction with the accompanying notes.
Consolidated Cash Flow Statements
This page has been left blank intentionally.
89
88 Charter Hall Group Annual Report 2024 / Directors’ Report and Financial Report / Consolidated Cash Flow Statements
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The notes to these consolidated financial statements include additional information to assist the reader in understanding the
operations, performance and financial position of the Charter Hall Group and the Charter Hall Property Trust Group. The financial
report of Charter Hall Group (Group or CHC) comprises Charter Hall Limited (Company or CHL) and its controlled entities, which
include Charter Hall Funds Management Limited as the Responsible Entity of Charter Hall Property Trust (CHPT or Trust) and CHPT
and its controlled entities. The financial report of the Charter Hall Property Trust Group comprises the Trust and its controlled entities.
Critical accounting estimates and judgements
The preparation of the consolidated financial statements in conformity with Australian Accounting Standards requires the use of certain
critical accounting estimates, assumptions and judgements in the process of applying accounting policies.
Estimates and judgements are continually evaluated and are based on experience and other factors, including expectations of future
events that may have a financial impact on the entity and that are believed to be reasonable under the circumstances. The critical
judgements that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities are described
in their respective notes:
‒
Note 2
Investments in associates
‒
Note 3
Investments in joint ventures
‒
Note 4
Revenue
‒
Note 11
Intangible assets
‒
Note 21(d)
Valuation techniques used to derive Level 3 fair values
‒
Note 23
Controlled entities
1
Segment information
(a)
Description of segments
Charter Hall Group
The operating segments disclosed are based on the reports reviewed by the Group CEO to make strategic decisions, assess
performance, and allocate resources. Operating earnings is a financial measure which represents statutory profit after tax adjusted for
the items in Note 1(c). Operating earnings is the primary measure of the Group’s underlying and recurring earnings. Operating earnings
is used by the Group CEO to make strategic decisions and as a guide to assessing an appropriate distribution to declare.
The Group’s operating segments comprise:
Property investments
This segment comprises investments in property funds.
Development investments
This segment comprises investments in developments.
Funds management
This segment comprises investment management services and property services.
Geographical segments are immaterial as the vast majority of the Group’s income is from Australian sources. Assets and liabilities
have not been reported on a segmented basis as the Group CEO is focused on the consolidated balance sheet.
Charter Hall Property Trust Group
The Group CEO allocates resources and assesses the performance of operating segments for the entire Charter Hall Group. Results
are not separately identified and reported according to the legal structure of the Charter Hall Group and therefore segment information
for CHPT is not prepared or provided to the Group CEO.
(b)
Proportionally consolidated operating segments
The operating segments reported to the Group CEO for the reportable segments for the year ended 30 June 2024 are as follows:
1
Segment information continued
Property
Investment
Development
Investment
Funds
Management1
Total
2024
$'m
$'m
$'m
$'m
Revenue
322.8
73.3
448.6
844.7
Costs and expenses2
(90.2)
(36.9)
(148.4)
(275.5)
Elimination of co-investment revenue3
38.4
–
(38.4)
–
Non-real estate earnings
–
–
9.8
9.8
EBITDA
271.0
36.4
271.6
579.0
Depreciation and amortisation expense
–
–
(11.5)
(11.5)
Net interest expense
(84.5)4
(1.7)
(19.8)5
(106.0)
Elimination of co-investment revenue reinstatement6
(38.4)
–
38.4
–
Operating earnings before tax
148.1
34.7
278.7
461.5
Income tax expense
(102.8)
Operating earnings attributable to stapled
securityholders
358.7
Basic weighted average number of stapled securities
473.0
Operating earnings per stapled security (cents)
75.8
2023
Revenue
280.3
249.3
565.8
1,095.4
Costs and expenses2
(79.7)
(212.7)
(156.5)
(448.9)
Elimination of co-investment revenue3
47.9
–
(47.9)
–
Non-real estate earnings
–
–
14.0
14.0
EBITDA
248.5
36.6
375.4
660.5
Depreciation and amortisation expense
–
–
(8.2)
(8.2)
Net interest expense
(63.1)4
(0.6)
(17.1)5
(80.8)
Elimination of co-investment revenue reinstatement6
(47.9)
–
47.9
–
Operating earnings before tax
137.5
36.0
398.0
571.5
Income tax expense
(130.3)
Operating earnings attributable to stapled
securityholders
441.2
Basic weighted average number of stapled securities
473.0
Operating earnings per stapled security (cents)
93.3
1
Funds management revenue comprises fees paid by the funds to Group for investment management, asset management, property management, development
management and leasing and transactions services.
2
Costs and expenses comprise net operating expenses, corporate expenses, and other costs.
3
The Group’s co-investment share of revenue paid by the funds to the Group, eliminated on proportional consolidation (i.e. Inter-segment eliminations).
4
Group co-investment share of interest expense in funds, net of interest income and derivative income/expense (excluding fair value movements which are non-operating).
5
Interest expense on balance sheet borrowings, net of interest income and derivative income/expense (excluding fair value movements which are non-operating).
6
Reversal of inter-segment eliminations recognised in EBITDA (footnote 3).
Notes to the Consolidated Financial Statements
91
90 Charter Hall Group Annual Report 2024 / Directors’ Report and Financial Report / Notes to the Consolidated Financial Statements
Back to Contents
1
Segment information continued
(c)
The reconciliation of operating earnings to statutory profit after tax attributable to stapled securityholders
is shown below
2024
2023
$'m
$'m
Operating earnings attributable to stapled securityholders
358.7
441.2
Net fair value movements on investments & property1
(461.7)
(220.7)
Net gain/(loss) on disposal of equity accounted investments1
(17.9)
–
Non-operating income tax benefit/(expense)
8.3
4.6
Realised and unrealised net (losses)/gains on derivatives1
(43.9)
(8.5)
Impairment of equity accounted investments
(48.4)
(9.1)
Performance fees expense1
3.6
3.0
Amortisation expense
(23.2)
(18.7)
Other1
2.4
4.3
Statutory profit/(loss) after tax attributable to stapled
securityholders
(222.1)
196.1
1 Includes the Group's proportionate share of non-operating items of equity accounted investments on a look through basis.
(d)
Reconciliation of segment earnings to the share of net profit of equity accounted investments
2024
2023
$'m
$'m
Segment earnings – property investments
148.1
137.5
Segment earnings – development investments
34.7
36.0
Segment earnings – funds management
9.8
14.0
192.6
187.5
Add: Non-operating equity accounted profit/(loss)
(501.3)
(238.4)
Less: Development profit
(32.8)
(26.6)
Less: Net gain on investment in associates and financial assets at fair value
(8.0)
(1.7)
Less: Interest income on loan receivable
–
(2.2)
Less: Interest expense/(income) on development investments
0.1
(0.3)
Less: Distributions in operating income
(0.9)
(1.7)
Share of net profit of investments accounted for using the equity method
(350.3)
(83.4)
(e)
Reconciliation of funds management earnings to revenue per the statement of comprehensive income
2024
2023
$'m
$'m
Investment management revenue
342.0
458.0
Property services revenue
106.6
107.8
Segment revenue – funds management
448.6
565.8
Add: Recovery of property and fund-related expenses
86.6
70.5
Add: Development revenue
43.5
217.0
Add: Rental income
5.2
2.6
Add: Interest income
13.0
12.1
Add: Distributions received for investments accounted for at fair value
0.9
1.7
Revenue per statement of comprehensive income
597.8
869.7
2
Investment in associates
(a)
Carrying amounts
All associates are incorporated and operate in Australia. Refer to Note 31(c) for accounting policy information relating to associates.
Ownership interest
Carrying amount
Charter Hall Group
2024
2023
2024
2023
Name of entity
Principal activity
%
%
$'m
$'m
Accounted for at fair value through
profit or loss:1
Unlisted
Charter Hall Maxim Property Securities Fund Property investment
16.1
14.1
27.2
22.6
CH Deep Value AREIT Partnership Trust
Property investment
14.0
14.0
21.7
20.9
Other associates
4.1
23.1
53.0
66.6
Equity accounted
Unlisted
Charter Hall Prime Office Fund
Property investment
4.8
4.8
230.4
290.9
Charter Hall Office Trust2
Property investment
15.7
15.7
224.2
277.8
Charter Hall Direct PFA Fund
Property investment
12.6
12.4
120.8
172.6
Charter Hall Direct Office Fund
Property investment
8.7
8.6
115.2
162.8
Charter Hall Prime Industrial Fund
Property investment
1.3
1.3
110.2
121.0
Core Logistics Partnership
Property investment
4.9
5.6
83.7
92.4
Deep Value Partnership
Property investment
13.2
13.0
61.0
67.5
Charter Hall Direct Industrial Fund No. 4
Property investment
1.8
–
33.3
–
Charter Hall Exchange Wholesale Trust
Property investment
6.5
3.0
28.8
17.5
Other associates
52.8
55.8
Listed
Charter Hall Long WALE REIT3
Property investment
10.6
10.7
350.4
429.2
Charter Hall Retail REIT4
Property investment
9.3
10.7
241.1
288.7
Charter Hall Social Infrastructure REIT5
Property investment
8.6
8.7
119.2
126.0
1,771.1
2,102.2
Total investments in associates
1,824.1
2,168.8
1
These investments comprise units in certain unlisted Charter Hall managed funds which have been designated at fair value through profit or loss. Changes in fair values
of investments in associates at fair value through profit or loss are recorded in fair value adjustments in the consolidated statement of comprehensive income. Information
about the Charter Hall Group’s material exposure to share and unit price risk is provided in Note 20.
2
The entity has a 31 December balance date.
3
Fair value at the ASX closing price as at 30 June 2024 was $247.9 million (30 June 2023: $309.5 million).
4
Fair value at the ASX closing price as at 30 June 2024 was $176.5 million (30 June 2023: $224.2 million).
5
Fair value at the ASX closing price as at 30 June 2024 was $75.7 million (30 June 2023: $94.0 million).
93
92 Charter Hall Group Annual Report 2024 / Directors’ Report and Financial Report / Notes to the Consolidated Financial Statements
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2
Investment in associates continued
Ownership interest
Carrying amount
Charter Hall Property Trust Group
2024
2023
2024
2023
Name of entity
Principal activity
%
%
$'m
$'m
Accounted for at fair value through
profit or loss:1
Unlisted
Charter Hall Maxim Property Securities Fund
Property investment
16.1
14.1
27.2
22.6
CH Deep Value AREIT Partnership Trust
Property investment
14.0
14.0
21.7
20.9
Other associates
4.1
23.1
53.0
66.6
Equity accounted
Unlisted
Charter Hall Office Trust2
Property investment
15.7
15.7
224.2
277.8
Charter Hall Prime Office Fund
Property investment
3.7
3.7
176.7
222.7
Charter Hall Direct PFA Fund
Property investment
12.6
12.4
120.8
172.6
Charter Hall Direct Office Fund
Property investment
8.7
8.6
115.2
162.8
Core Logistics Partnership
Property investment
4.9
5.6
83.7
92.4
Deep Value Partnership
Property investment
13.2
13.0
61.0
67.5
Charter Hall Direct Industrial Fund No. 4
Property investment
1.8
–
33.3
–
Charter Hall Exchange Wholesale Trust
Property investment
6.5
3.0
28.8
17.5
Charter Hall Prime Industrial Fund
Property investment
0.2
0.3
21.4
23.3
Other associates
66.0
67.4
Listed
Charter Hall Long WALE REIT3
Property investment
10.6
10.7
350.4
429.2
Charter Hall Retail REIT4
Property investment
9.3
10.7
241.1
288.7
Charter Hall Social Infrastructure REIT5
Property investment
8.6
8.7
144.1
150.9
1,666.7
1,972.8
Total investments in associates
1,719.7
2,039.4
1
These investments comprise units in certain unlisted Charter Hall managed funds which have been designated at fair value through profit or loss. Changes in fair values
of investments in associates at fair value through profit or loss are recorded in fair value adjustments in the consolidated statement of comprehensive income. Information
about the Charter Hall Property Trust Group’s material exposure to share and unit price risk is provided in Note 20.
2
The entity has a 31 December balance date.
3
Fair value at the ASX closing price as at 30 June 2024 was $247.9 million (30 June 2023: $309.5 million).
4
Fair value at the ASX closing price as at 30 June 2024 was $176.5 million (30 June 2023: $224.2 million).
5
Fair value at the ASX closing price as at 30 June 2024 was $75.7 million (30 June 2023: $94.0 million).
(b)
Critical judgements
Investments in associates are accounted for at either fair value through profit or loss or by using the equity method. The Group
designates investments in associates as fair value through profit or loss or equity accounted on a case by case basis taking the
investment strategy into consideration. In instances where the Group owns less than 20% of the ownership interest in an investment,
management will assess the Group influence within the investment and its ability to participate in the financial and operational
decisions.
Management regularly reviews equity accounted investments for impairment and remeasures investments carried at fair value through
profit or loss by reference to changes in circumstances or contractual arrangements, external independent property valuations and
market conditions, using generally accepted market practices. When a recoverable amount is estimated through a value in use
calculation, critical judgements and estimates are made regarding future cash flows and an appropriate discount rate. When a fair
value is estimated through an earnings valuation, critical judgements and estimates are made in relation to the earnings measure and
appropriate multiple.
Due to the difference in the fair value and carrying amounts, the recoverable amounts for all listed equity accounted investments were
estimated through a value in use calculation. These calculations were performed using the share of the present value of the estimated
future cash flows expected to be generated by the associates and used the following assumptions:
base case cash flow projections covering a 10 year period based on executed lease agreements, CPI estimates and
estimated net market rents;
weighted average investment property discount rates of 6.7%-7.5%; and
investment property terminal values calculated using capitalisation rates of 5.6%-6.3%.
Independent external valuation support for the investment property carrying values of underlying listed funds was obtained for 82% of
the gross asset values on a look-though basis as at June 2024 and 90% of asset values from March 2024 to June 2024.
2
Investment in associates continued
(c)
Summarised movements in carrying amounts of associates accounted for at fair value through profit or loss
Charter Hall Group
Charter Hall Property
Trust Group
2024
2023
2024
2023
$'m
$'m
$'m
$'m
Opening balance
66.6
42.4
66.6
42.4
Investment
0.8
28.2
0.8
28.2
Net gain/(loss) on investment in associates at fair value
7.6
(4.0)
7.6
(4.0)
Divestments
(22.0)
–
(22.0)
–
Closing balance
53.0
66.6
53.0
66.6
(d)
Summarised movements in carrying amounts of equity accounted associates
Charter Hall Group
Charter Hall Property
Trust Group
2024
2023
2024
2023
$'m
$'m
$'m
$'m
Opening balance
2,102.2
2,241.6
1,972.8
2,180.9
Investment
135.0
204.7
134.9
132.6
Share of profit/(loss) after income tax
(278.9)
(62.7)
(261.0)
(65.3)
Distributions received/receivable
(89.7)
(98.2)
(84.1)
(92.9)
Share of movement in reserves
0.2
1.0
(0.2)
1.1
Impairment of carrying amount
–
(7.1)
–
(7.1)
Divestments
(96.3)
(177.1)
(95.7)
(176.5)
Return of capital
(1.4)
–
–
–
Closing balance
1,771.1
2,102.2
1,666.7
1,972.8
(e)
Summarised financial information for material associates
The tables below provide summarised financial information for the associates that are material to CHC and CHPT. Materiality is
assessed on the investments’ contribution to Group income and net assets. The information presented reflects the amounts in the
financial statements of the associates, not the Group’s proportionate share.
Charter Hall
Charter Hall
Charter Hall
Charter Hall
Prime Office
Long WALE
Office Trust
Retail REIT
Fund
REIT
$'m
$'m
$'m
$'m
2024
Summarised balance sheet:
Current assets
53.0
68.5
427.3
374.1
Non-current assets
3,160.5
3,729.1
7,729.7
4,878.4
Current liabilities
32.4
120.4
157.2
90.2
Non-current liabilities
1,756.2
1,058.6
3,148.8
1,792.4
Net assets
1,424.9
2,618.6
4,851.0
3,369.9
Summarised statement of comprehensive income:
Revenue
120.7
215.7
456.1
219.9
Profit/(loss) for the year from continuing operations
(342.6)
17.2
(1,012.9)
(510.9)
Other comprehensive loss
–
(3.5)
(1.1)
(1.1)
Total comprehensive income/(loss)
(342.6)
13.7
(1,014.0)
(512.0)
2023
Summarised balance sheet:
Current assets
35.1
68.0
339.8
48.3
Non-current assets
3,718.6
4,031.5
8,724.9
6,155.1
Current liabilities
35.1
120.3
258.9
90.7
Non-current liabilities
1,952.6
1,230.7
2,748.5
2,043.0
Net assets
1,766.0
2,748.5
6,057.3
4,069.7
Summarised statement of comprehensive income:
Revenue
108.8
213.4
401.7
222.5
Profit/(loss) for the year from continuing operations
(182.4)
37.8
(174.0)
(189.0)
Other comprehensive income/(loss)
–
6.2
(0.3)
2.9
Total comprehensive income/(loss)
(182.4)
44.0
(174.3)
(186.1)
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94 Charter Hall Group Annual Report 2024 / Directors’ Report and Financial Report / Notes to the Consolidated Financial Statements
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2
Investment in associates continued
(f)
Reconciliation of net assets of associates to carrying amounts of equity accounted investments
Charter Hall
Charter Hall
Charter Hall
Charter Hall
Prime Office
Long WALE
Office Trust
Retail REIT
Fund
REIT
Charter Hall Group
$'m
$'m
$'m
$'m
2024
Net assets of associate
1,424.9
2,618.6
4,851.0
3,369.9
Group's share in %
15.7%
9.3%
4.8%
10.6%
Group's share in $
224.2
246.1
234.6
357.2
Other movements not accounted for under the equity
method1
–
(5.0)
(4.2)
(6.8)
Carrying amount
224.2
241.1
230.4
350.4
Movements in carrying amounts:
Opening balance
277.8
288.7
290.9
429.2
Investment
5.4
–
–
–
Share of earnings after income tax
(53.9)
2.3
(50.9)
(53.7)
Other comprehensive loss
–
(0.2)
–
(0.1)
Distributions received/receivable
(5.1)
(13.7)
(9.6)
(20.0)
Divestment
–
(36.0)
–
(5.0)
Closing balance
224.2
241.1
230.4
350.4
2023
Net assets of associate
1,766.0
2,748.5
6,057.3
4,069.7
Group's share in %
15.7%
10.7%
4.8%
10.7%
Group's share in $
277.8
294.1
292.6
435.5
Other movements not accounted for under the equity
method1
–
(5.4)
(1.7)
(6.3)
Carrying amount
277.8
288.7
290.9
429.2
Movements in carrying amounts:
Opening balance
311.2
300.6
325.6
470.7
Investment
1.9
–
72.0
–
Share of earnings after income tax
(28.7)
4.0
(8.4)
(20.2)
Other comprehensive income
–
0.8
–
0.3
Impairment of carrying amount
(0.3)
–
–
–
Distributions received/receivable
(6.3)
(16.7)
(11.5)
(21.6)
Divestment
–
–
(86.8)
–
Closing balance
277.8
288.7
290.9
429.2
1
Other movements are primarily due to the funds issuing new units to external investors at a price above or below the underlying net assets of the fund, or where the
Group has historically acquired units on-market at a price different to the fund's NTA (for listed investments), or where the Group has recorded an impairment to the
investment in associate.
2
Investment in associates continued
Charter Hall
Charter Hall
Charter Hall
Charter Hall
Prime Office
Long WALE
Office Trust
Retail REIT
Fund
REIT
Charter Hall Property Trust Group
$'m
$'m
$'m
$'m
2024
Net assets of associate
1,424.9
2,618.6
4,851.0
3,369.9
Group's share in %
15.7%
9.3%
3.7%
10.6%
Group's share in $
224.2
246.1
180.1
357.2
Other movements not accounted for under the equity
method1
–
(5.0)
(3.4)
(6.8)
Carrying amount
224.2
241.1
176.7
350.4
Movements in carrying amounts:
Opening balance
277.8
288.7
222.7
429.2
Investment
5.4
–
–
–
Share of earnings after income tax
(53.9)
2.3
(38.7)
(53.7)
Other comprehensive loss
–
(0.2)
–
(0.1)
Distributions received/receivable
(5.1)
(13.7)
(7.3)
(20.0)
Divestment
–
(36.0)
–
(5.0)
Closing balance
224.2
241.1
176.7
350.4
2023
Net assets of associate
1,766.0
2,748.5
6,057.3
4,069.7
Group's share in %
15.7%
10.7%
3.7%
10.7%
Group's share in $
277.8
294.1
224.7
435.5
Other movements not accounted for under the equity
method1
–
(5.4)
(2.0)
(6.3)
Carrying amount
277.8
288.7
222.7
429.2
Movements in carrying amounts:
Opening balance
311.2
300.6
325.6
470.7
Investment
1.9
–
–
–
Share of earnings after income tax
(28.7)
4.0
(6.2)
(20.2)
Other comprehensive income
–
0.8
–
0.3
Impairment of carrying amount
(0.3)
–
–
–
Distributions received/receivable
(6.3)
(16.7)
(10.1)
(21.6)
Divestment
–
–
(86.6)
–
Closing balance
277.8
288.7
222.7
429.2
1
Other movements are primarily due to the funds issuing new units to external investors at a price above or below the underlying net assets of the fund, or where the
Group has historically acquired units on-market at a price different to the fund's NTA (for listed investments), or where the Group has recorded an impairment to the
investment in associate.
(g)
Commitments and contingent liabilities of associates
The Group’s associate entities may enter into contracts for the acquisition, construction and development of properties in Australia. The
commitments in relation to such contracts are $1,106.4 million (30 June 2023: $1,664.2 million). These commitments have not been
recognised in the consolidated financial statements.
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96 Charter Hall Group Annual Report 2024 / Directors’ Report and Financial Report / Notes to the Consolidated Financial Statements
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3
Investments in joint ventures
(a) Carrying amounts
All joint ventures are incorporated and operate in Australia. Refer to Note 31(c) for accounting policy information relating to joint
ventures.
Unless otherwise noted all joint ventures have a 30 June year end.
Ownership interest
Carrying amount
Charter Hall Group
2024
2023
2024
2023
Name of entity
Principal activity
%
%
$'m
$'m
Accounted for at fair value through
profit or loss:
Unlisted
Other joint ventures
36.2
57.0
36.2
57.0
Equity accounted
Unlisted
Long WALE Hardware Partnership1
Property investment
16.8
17.5
217.4
236.2
Paradice Investment Management
Funds management
50.0
50.0
145.8
196.8
CH 52 Martin Place Trust
Property investment
50.0
–
120.3
–
Brisbane Square Wholesale Fund
Property investment
16.8
16.8
110.9
129.6
Charter Hall PGGM Industrial Partnership No. 2
Property investment
12.0
12.0
83.5
94.6
CH Genge Office Trust
Property investment
49.9
49.9
71.0
78.8
CH DJ Trust
Property investment
43.2
43.2
61.1
68.5
CH Investment Trust
Property investment
50.0
–
46.0
–
Charter Hall PGGM Industrial Partnership
Property investment
12.0
12.0
33.9
46.9
Charter Hall Koala Investment Partnership
Property investment
20.0
20.0
25.9
26.7
CH Castlereagh Trust
Property development
50.1
50.1
21.4
27.4
Other joint ventures
64.3
59.0
1,001.5
964.5
Total investments in joint ventures
1,037.7
1,021.5
1
Ownership interest is calculated as the weighted average holding of BP Fund 1 and BP Fund 2.
Ownership interest
Carrying amount
Charter Hall Property Trust Group
2024
2023
2024
2023
Name of entity
Principal activity
%
%
$'m
$'m
Accounted for at fair value through
profit or loss:
Unlisted
Other joint ventures
36.2
57.0
36.2
57.0
Equity accounted
Unlisted
Long WALE Hardware Partnership1
Property investment
16.8
17.5
217.4
236.2
CH 52 Martin Place Trust
Property investment
50.0
–
120.3
–
Brisbane Square Wholesale Fund
Property investment
16.8
16.8
110.9
129.6
Charter Hall PGGM Industrial Partnership No. 2
Property investment
12.0
12.0
83.5
94.6
CH DJ Trust
Property investment
43.2
43.2
61.1
68.5
CH Investment Trust
Property investment
50.0
–
46.0
–
Charter Hall PGGM Industrial Partnership
Property investment
12.0
12.0
33.9
46.9
Charter Hall Koala Investment Partnership
Property investment
20.0
20.0
25.9
26.7
Other joint ventures
55.6
46.1
754.6
648.6
Total investments in joint ventures
790.8
705.6
1
Ownership interest is calculated as the weighted average holding of BP Fund 1 and BP Fund 2.
3
Investments in joint ventures continued
(b) Critical judgements
Investments in joint ventures are accounted for at either fair value through profit or loss or by using the equity method. The Group
designates investments in joint ventures as fair value through profit or loss or equity accounted on a case by case basis taking the
investment strategy into consideration.
Management regularly reviews equity accounted investments for impairment and remeasures investments carried at fair value through
profit or loss by reference to changes in circumstances or contractual arrangements, external independent property valuations and
market conditions, using generally accepted market practices. When a recoverable amount is estimated through a value in use
calculation, critical judgements and estimates are made regarding future cash flows and an appropriate discount rate. When a fair
value is estimated through an earnings valuation, critical judgements and estimates are made in relation to the earnings measure and
appropriate multiple.
The recoverable amount for the Paradise Investment Management (PIM) investment was estimated through a value in use calculation.
As a result of these estimates, impairment of $48.4m was recorded during the year ended 30 June 2024 (2023: $nil)
(c)
Summarised movements in carrying amounts of joint ventures accounted for at fair value through profit or loss
Charter Hall Group
Charter Hall Property
Trust Group
2024
2023
2024
2023
$'m
$'m
$'m
$'m
Opening balance
57.0
–
57.0
–
Investment
–
57.0
–
57.0
Share of profit after income tax
6.4
–
6.4
–
Distributions received/receivable
(6.4)
–
(6.4)
–
Return of capital
(20.8)
–
(20.8)
–
Closing balance
36.2
57.0
36.2
57.0
(d) Summarised financial information and movements in carrying amounts of equity accounted joint ventures
Charter Hall Group
Charter Hall Property
Trust Group
2024
2023
2024
2023
$'m
$'m
$'m
$'m
Movements in aggregate carrying amount:
Opening balance
964.5
791.5
648.6
569.2
Investment
213.0
272.6
213.1
158.4
Share of profit/(loss) after income tax
(71.4)
(20.7)
(79.7)
(35.3)
Distributions received/receivable
(44.3)
(57.6)
(19.8)
(22.5)
Impairment of carrying amount
(48.4)
(2.0)
–
(2.0)
Return of capital
(11.9)
(19.4)
(7.6)
(19.3)
Share of movement in reserves
–
0.1
–
0.1
Closing balance
1,001.5
964.5
754.6
648.6
(e) Commitments and contingent liabilities of joint ventures
The Group’s joint venture entities may enter into contracts for the acquisition, construction and development of properties in Australia.
The commitments in relation to such contracts are $484.1 million (30 June 2023: $250.8 million). These commitments have not been
recognised in the consolidated financial statements.
99
98 Charter Hall Group Annual Report 2024 / Directors’ Report and Financial Report / Notes to the Consolidated Financial Statements
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4
Revenue
Charter Hall Group
Charter Hall Property
Trust Group
2024
2023
2024
2023
$'m
$'m
$'m
$'m
Investment management revenue
342.0
458.0
–
–
Property services revenue
106.6
107.8
–
–
Development revenue
43.5
219.6
–
–
Gross rental income
5.2
–
5.8
–
497.3
785.4
5.8
–
Other revenue
Recovery of property and fund-related expenses
86.6
70.5
–
–
Interest
13.0
12.1
0.9
2.6
Distributions/Dividends
0.9
1.7
0.9
1.7
Other investment-related revenue
–
–
17.4
17.5
Total other revenue
100.5
84.3
19.2
21.8
Total revenue
597.8
869.7
25.0
21.8
(a) Critical judgements
Critical judgements and estimates are made by the Group in respect of recognising performance fee revenue. Detailed calculations and
an assessment of the risks associated with the recognition of the fee are completed to inform the assessment of the appropriate
revenue to recognise. Key risks include the period remaining from balance sheet date to performance fee crystallisation date and the
degree of probability that any potential fee may unwind during that period. Key drivers of performance fees are assessed based on
historic data and prevailing economic conditions to inform judgements on the extent to which the fee can be reliably estimated.
Critical judgements are also made by the Group in respect of recognising development revenue. Detailed forecasts of total
development costs are inputs that are used to estimate the satisfaction of the development performance obligation over time.
5
Expenses
Charter Hall Group
Charter Hall Property
Trust Group
2024
2023
2024
2023
Note
$'m
$'m
$'m
$'m
Profit before income tax includes the following specific
expenses:
Employee benefit expenses
162.3
165.6
–
–
Security-based benefits expense
17.1
12.6
–
–
Payroll tax
13.0
8.8
–
–
Total employee costs
192.4
187.0
–
–
Advertising, marketing and promotion
6.0
7.6
–
–
Occupancy costs
3.3
2.4
–
–
Communication and IT expenses
11.6
12.6
–
–
Accounting, professional, administration and other costs
21.6
17.5
4.1
3.6
Total administration and other expenses
42.5
40.1
4.1
3.6
Depreciation
11.5
8.2
–
–
Amortisation
0.5
0.5
–
–
Impairment
3(b)
48.4
9.1
–
9.1
Provision expenses
5.0
–
–
–
Total depreciation, amortisation, impairment and provision
expenses
65.4
17.8
–
9.1
6
Income tax expense
Charter Hall Group
Charter Hall Property
Trust Group
2024
2023
2024
2023
Note
$'m
$'m
$'m
$'m
(a)
Income tax expense
Current tax expense
105.6
130.0
–
–
Deferred income tax benefit
(11.4)
(4.5)
–
–
Over/(under)-provided in prior years
0.3
0.2
–
–
94.5
125.7
–
–
Deferred income tax benefit
Decrease/(increase) in deferred tax assets for the tax
consolidated group
(6.9)
(0.7)
–
–
Decrease in deferred tax liabilities for the tax consolidated group
(4.2)
(3.8)
–
–
(11.1)
(4.5)
–
–
(b)
Reconciliation of income tax expense to prima facie tax
payable
Profit before income tax expense
(127.6)
321.8
(375.0)
(115.9)
Prima facie tax expense at the Australian tax rate of 30%
(38.3)
96.5
(112.5)
(34.8)
Tax effect of amounts which are not deductible/(taxable)
in calculating taxable income:
Charter Hall Property Trust profit
112.5
34.8
112.5
34.8
Other adjustments
20.3
(5.6)
–
–
Income tax expense
94.5
125.7
–
–
(c)
Amounts recognised directly in equity
Aggregate current and deferred tax arising in the reporting
period and not recognised in net profit or loss or other
comprehensive income but directly debited or credited to equity:
Current tax: Deduction for rights vesting in excess of the
cumulative fair value expense
(0.2)
(0.7)
–
–
Deferred tax: Estimated future deduction for rights vesting, in
excess of the cumulative fair value expense
0.4
–
–
–
0.2
(0.7)
–
–
(d)
Tax consolidation legislation
Charter Hall Limited and its wholly owned Australian controlled entities have implemented the tax consolidation legislation with effect
from 1 July 2003. The accounting policy in relation to this legislation is set out below in Note 6(g).
On adoption of the tax consolidation legislation, the entities in the tax consolidated group entered into a tax sharing agreement which,
in the opinion of the Directors, limits the joint and several liability of the wholly owned entities in the case of a default by the head entity,
Charter Hall Limited.
The entities have also entered into a tax funding agreement under which the wholly owned entities fully compensate Charter Hall
Limited for any current tax payable assumed and are compensated by Charter Hall Limited for any current tax receivable and deferred
tax assets relating to unused tax losses or unused tax credits that are transferred to Charter Hall Limited under the tax consolidation
legislation. The funding amounts are determined by reference to the amounts recognised in the wholly owned entities’ financial
statements.
(e)
Charter Hall Property Trust
Under current Australian income tax legislation, the Trust is not liable for income tax on its taxable income (including any assessable
component of capital gains) provided that the unitholders are presently entitled to the income of the Trust.
(f)
Tax losses and unrecognised temporary differences – Charter Hall Group
At 30 June 2024, the Group has approximately $17.3 million (2023: $17.6 million) of tax effected unrecognised capital tax losses. At 30
June 2024, temporary differences relating to investments in associates for which deferred tax assets have not been recognised of
$28.5m (2023: $6.3m).
101
100 Charter Hall Group Annual Report 2024 / Directors’ Report and Financial Report / Notes to the Consolidated Financial Statements
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6
Income tax expense continued
(g)
Income tax
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting
period. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is
subject to interpretation and establishes provision, where appropriate, on the basis of amounts expected to be paid to the tax
authorities.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets are
recovered or liabilities are settled, based on those tax rates which are enacted or substantively enacted for each jurisdiction. The
relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences to measure the deferred tax
asset or liability. No deferred tax asset or liability is recognised in relation to these temporary differences if they arose in a transaction,
other than a business combination, that at the time of the transaction did not affect either accounting profit or taxable profit or loss.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable
amounts will be available to utilise those temporary differences and losses.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of
investments in controlled entities where the parent entity is able to control the timing of the reversal of the temporary differences and it
is probable that the differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when
the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a
legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive
income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.
7
Distributions/Dividends paid and payable
Charter Hall Group
Charter Hall Property
Trust Group
2024
2023
2024
2023
$'m
$'m
$'m
$'m
Ordinary stapled securities
Final ordinary distribution of 2.30 cents and final ordinary
dividend of 20.70 cents per stapled security for the six months
ended 30 June 2024 payable on 30 August 2024
108.7
–
10.8
–
Interim ordinary distribution of 12.15 cents and interim ordinary
dividend of 9.94 cents per stapled security for the six months
ended 31 December 2023 paid on 29 February 2024
104.5
–
57.5
–
Final ordinary distribution of 11.90 cents and final ordinary
dividend of 9.80 cents per stapled security for the six months
ended 30 June 2023 paid on 31 August 2023
–
102.6
–
56.3
Interim ordinary distribution of 11.46 cents and interim ordinary
dividend of 9.38 cents per stapled security for the six months
ended 31 December 2022 paid on 28 February 2023
–
98.6
–
54.2
Total Distributions/Dividends paid and payable to stapled
securityholders
213.2
201.2
68.3
110.5
Total Distributions/Dividends paid and payable
213.2
201.2
68.3
110.5
A liability is recognised for the amount of any distribution/dividend declared by the Group on or before the end of the reporting period
but not paid at balance date.
Franking credits available in the parent entity (Charter Hall Limited) for dividends payable in subsequent financial years based on a tax
rate of 30% (2023: 30%) are $383.9 million (2023: $345.0 million). These amounts are calculated from the balance of the franking
account as at the end of the reporting period, adjusted for franking credits and debits that will arise from the settlement of liabilities or
receivables for income tax and dividends after the end of the year.
8
Earnings per stapled security
Charter Hall Group
Charter Hall Property
Trust Group
2024
2023
2024
2023
Cents
Cents
Cents
Cents
(a)
Basic earnings per security attributable to:
Equity holders of Charter Hall Limited
32.3
66.0
n/a
n/a
Equity holders of Charter Hall Property Trust (non-controlling
interest)
(79.3)
(24.5)
(79.3)
(24.5)
Stapled securityholders of Charter Hall Group
(47.0)
41.5
n/a
n/a
(b)
Diluted earnings per security attributable to:
Equity holders of Charter Hall Limited
31.7
64.8
n/a
n/a
Equity holders of Charter Hall Property Trust (non-controlling
interest)
(77.7)
(24.1)
(77.7)
(24.1)
Stapled securityholders of Charter Hall Group
(46.0)
40.7
n/a
n/a
Basic earnings per stapled security is determined by dividing profit attributable to the stapled securityholders by the weighted average
number of ordinary stapled securities on issue during the year.
Diluted earnings per stapled security is determined by dividing profit attributable to the stapled securityholders by the weighted average
number of ordinary stapled securities and dilutive potential ordinary stapled securities on issue during the year.
2024
2023
2024
2023
$'m
$'m
$'m
$'m
(c)
Reconciliations of earnings used in calculating
earnings per stapled security
Equity holders of Charter Hall Limited
152.9
311.9
n/a
n/a
Equity holders of Charter Hall Property Trust (non-controlling
interest)
(375.0)
(115.9)
(375.0)
(115.9)
Profit attributable to the ordinary stapled securityholders of
the Group used in calculating basic and diluted earnings per
stapled security
(222.1)
196.1
(375.0)
(115.9)
2024
2023
2024
2023
Number
Number
Number
Number
(d)
Weighted average number of stapled securities
used as the denominator
Weighted average number of ordinary stapled securities
used as the denominator in calculating basic earnings per
stapled security
472,997,199
472,997,199
472,997,199
472,997,199
Adjustments for calculation of diluted earnings per stapled
security:
Performance rights
8,014,201
7,412,684
8,014,201
7,412,684
Service rights
1,613,331
987,724
1,613,331
987,724
Weighted average number of ordinary stapled securities and
potential ordinary stapled securities used as the denominator
in calculating diluted earnings per stapled security
482,624,731
481,397,607
482,624,731
481,397,607
(e)
Information concerning the classification of securities
Performance rights, service rights issued under the Charter Hall Performance Rights and Options Plan
The performance and service rights are unquoted securities. Conversion to stapled securities and vesting to executives is subject to
performance and/or service conditions.
Stapled securities issued under the General Employee Securities Plan (GESP)
Stapled securities issued under the GESP are purchased on-market on behalf of eligible employees but held in trust until the earlier of
the completion of three years’ service or termination. No adjustment to diluted earnings per stapled security is required under the
GESP.
103
102 Charter Hall Group Annual Report 2024 / Directors’ Report and Financial Report / Notes to the Consolidated Financial Statements
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9
Receivables and other assets
Charter Hall Group
Charter Hall Property
Trust Group
2024
2023
2024
2023
Note
$'m
$'m
$'m
$'m
Current
Trade receivables
66.9
106.3
13.0
4.4
Distributions receivable
31.4
34.0
28.4
30.2
Other receivables and assets
7.1
19.2
4.4
4.5
105.4
159.5
45.8
39.1
Non-current
Loans to associates and joint ventures
22(e)
4.0
3.7
–
–
4.0
3.7
–
–
(a)
Bad and doubtful trade receivables
During the year, the Charter Hall Group and Charter Hall Property Trust Group incurred $nil expense (2023: $nil) in respect of
provisions for expected credit losses.
(b)
Fair values
Receivables are carried at amounts that approximate their fair value.
(c)
Credit risk
There is a limited concentration of credit risk as the majority of current and non-current receivables are due from related parties of
Charter Hall Group and Charter Hall Property Trust Group. Refer to Note 20 for more information on the risk management policy of the
Charter Hall Group and Charter Hall Property Trust Group.
The ageing of trade receivables at the reporting date was as follows:
Charter Hall Group
Charter Hall Property
Trust Group
2024
2023
2024
2023
$'m
$'m
$'m
$'m
Current
66.1
105.8
13.0
4.4
1 to 3 months
0.8
0.5
–
–
3 to 6 months
–
–
–
–
More than 6 months
–
–
–
–
66.9
106.3
13.0
4.4
As at 30 June 2024, Charter Hall Group had trade receivables of $nil (2023: $nil) past due but not impaired. Charter Hall Property Trust
Group had $nil (2023: $nil) receivables past due but not impaired.
Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectable are written off in the
year in which they are identified. A provision for expected credit losses is processed based on historical default percentages and
current observable data including forecasts of economic conditions. The amount of the provision is the difference between the carrying
amount and estimated future cash flows. Cash flows relating to current receivables are not discounted.
All distributions receivable are current.
10 Assets classified as held for sale
The held for sale asset will be deconsolidated on settlement and thereafter the residual interest accounted for as an equity accounted
investment. The purchaser is a related party.
Charter Hall Group
Charter Hall Property
Trust Group
2024
2023
2024
2023
$'m
$'m
$'m
$'m
Current assets held for sale
Investment property
78.8
–
78.8
–
Total current assets held for sale
78.8
–
78.8
–
Liabilities associated with assets classified as held for sale
Borrowings
35.5
–
35.5
–
Total liabilities associated with assets classified as held for
sale
35.5
–
35.5
–
The liabilities associated with assets classified as held for sale includes an A$55.0 million (2023: $nil) debt facility issued in
January 2024 with maturity in January 2027. At 30 June 2024, drawn borrowings of $35.5 million (2023: $nil) had been utilised
under these facilities. The facility has been classified as held for sale at year end.
11 Intangible assets
Charter Hall Group
Charter Hall Property
Trust Group
2024
2023
2024
2023
$'m
$'m
$'m
$'m
Indefinite life intangibles – management rights
Charter Hall Retail REIT
42.3
42.3
–
–
Charter Hall Social Infrastructure REIT
46.4
46.4
–
–
Other indefinite life intangibles
12.6
12.6
–
–
Total closing indefinite life intangibles
101.3
101.3
–
–
Finite life intangibles – management rights
Opening balance
2.3
2.8
–
–
Amortisation charge
(0.5)
(0.5)
–
–
Closing balance
1.8
2.3
–
–
At balance date – finite life intangibles
Cost
58.5
58.5
–
–
Accumulated amortisation
(56.7)
(56.2)
–
–
Total finite life intangibles
1.8
2.3
–
–
Goodwill
Opening and closing balance
9.9
9.9
–
–
Total intangible assets
113.0
113.5
–
–
(a)
Critical judgements
Critical judgements and estimates are made by the Group in assessing the recoverable amount of intangibles acquired, where the
funds to which those intangibles relate have an indefinite life. Intangibles are considered to have an indefinite useful life if there is no
foreseeable limit to the period over which the asset is expected to generate net cash inflows for the Group.
105
104 Charter Hall Group Annual Report 2024 / Directors’ Report and Financial Report / Notes to the Consolidated Financial Statements
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11 Intangible assets continued
(b)
Intangibles – indefinite life assets
Intangibles with no fixed life are not amortised as they have an indefinite life. Intangibles with an indefinite life are tested for impairment
annually, or more frequently if events or changes in circumstances indicate that they might be impaired, and are carried at cost less
accumulated impairment losses. Intangibles are allocated to cash-generating units for the purpose of impairment testing.
All indefinite life intangible assets recognised on the consolidated balance sheet are subject to an annual impairment assessment. The
impairment assessments support the carrying values and the methodology applied is an assessment of value in use based on
discounted cash flows.
Key assumptions used for the indefinite life intangible impairment calculations are as follows:
cash flow projections were used; applying probability weightings based on historical market guidance accuracy;
base case cash flow projections covering a 5 year period based on financial budgets approved by the board. Cash flows
beyond the 5 year period are extrapolated using estimated growth rates appropriate for the business;
pre-tax discount rate of 14.3% (2023: 12.5%);
growth after five years of 2.0% (2023: 2.0%) per annum; and
terminal value multiple of 10 times earnings (2023: 10 times).
(c)
Management Rights – finite life assets
Management rights with a fixed life are amortised using the straight line method over their useful life ranging from one to ten years.
12 Deferred tax assets and liabilities
Charter Hall Group
Charter Hall Property
Trust Group
2024
2023
2024
2023
$'m
$'m
$'m
$'m
Deferred tax assets comprises temporary differences attributable
to:
Employee benefits
24.9
22.0
–
–
Investments accounted for using the equity method
1.3
1.7
–
–
Other
10.8
6.9
–
–
37.0
30.6
–
–
Deferred tax liabilities comprises temporary differences
attributable to:
Intangible assets
29.4
29.5
–
–
Investments accounted for using the equity method
18.0
17.3
–
–
Share purchase option
0.6
5.0
–
–
Other
1.9
2.6
–
–
49.9
54.4
–
–
Net deferred tax liabilities
(12.9)
(23.8)
–
–
13 Trade and other liabilities
Charter Hall Group
Charter Hall Property
Trust Group
2024
2023
2024
2023
$'m
$'m
$'m
$'m
Current
Trade and other liabilities
58.6
62.2
11.6
6.5
Long service leave provision
4.6
3.7
–
–
Dividend/Distribution payable
108.7
102.6
10.8
56.3
Employee benefits liability
42.3
40.7
–
–
214.2
209.2
22.4
62.8
Non-current
Loan payable to Charter Hall Limited
22(e)
–
–
396.6
143.8
Long service leave provision
3.2
3.0
–
–
Lease incentive liability
1.8
1.7
–
–
5.0
4.7
396.6
143.8
Liabilities are recognised for amounts to be paid in the future for goods and services received, whether or not billed to the Group. The
amounts are unsecured and are usually paid within 30 days of recognition. Trade and other payables are presented as current liabilities
unless payment is not due or expected to be settled within 12 months after the reporting period. They are recognised initially at their fair
value and subsequently measured at amortised cost using the effective interest method.
107
106 Charter Hall Group Annual Report 2024 / Directors’ Report and Financial Report / Notes to the Consolidated Financial Statements
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14 Borrowings
Charter Hall Group
Charter Hall Property
Trust Group
2024
2023
2024
2023
$'m
$'m
$'m
$'m
Non-current liabilities
US Private Placement Notes
246.8
246.2
246.8
246.2
Medium-term notes
211.3
207.2
211.3
207.2
Less: unamortised transaction costs
(2.6)
(2.7)
(2.6)
(2.7)
455.5
450.7
455.5
450.7
(a) Borrowings
Charter Hall Group
The Group’s debt platform includes the following:
‒
A$200.0 million (2023: $200.0 million) bank debt facility plus an additional $50.0 million (2023: $50.0 million) unsecured facility to
support the issuance of bank guarantees with maturity in May 2027. At 30 June 2024, drawn borrowings of $nil (2023: $nil) and
issuance of bank guarantees of $38.95 million (2023: $37.4 million) had been utilised under these facilities, which under the terms
of the agreements reduce the available facilities. No liability is recognised for bank guarantees.
‒
A$100.0 million (2023: $nil) debt facility issued in July 2023 with maturity in July 2028. At 30 June 2024, drawn borrowings of $nil
(2023: $nil) had been utilised under these facilities. No liability is recognised.
‒
US$175 million (A$231.5 million at issue date) unsecured notes issued through a US Private Placement which was fully funded in
August 2018 and matures in August 2028.
‒
The Group has entered into A$/US$ cross-currency interest rate swap agreements that hedge the Group’s exposure to
foreign currency. The swap agreements entitle the Group to repay the notes at A$231.5 million in August 2028. At 30 June
2024, the carrying amount of the notes at the prevailing spot rate was A$246.8 million (2023: A$246.2 million) including a fair
value adjustment of A$15.2 million (2023: A$14.7 million). The movement in the carrying amount since issuance is offset by
the fair value of the swap A$17.2 million (2023: A$17.5 million).
‒
The swap agreements also entitle the Group to receive interest, at semi-annual intervals, at a fixed rate on a notional
principal amount of US$175.0 million and oblige it to pay, at quarterly intervals, at a floating rate on a notional principal
amount of A$231.5 million. The swap agreements mature in August 2028.
‒
A$250 million unsecured medium-term notes (MTN) issued in April 2021 and maturing in April 2031.
‒
The Group has entered into interest rate swap agreements that hedge the Group’s exposure to changes in the fair value of
the MTN. At 30 June 2024, the carrying amount of the notes was A$211.3 million (2023: A$207.2 million), including a fair
value adjustment of A$38.7 million (2023: A$42.8 million). The movement in the carrying amount since issuance is offset by
the fair value of the swap liability A$38.2 million (2023: A$41.1 million liability).
(b) Gearing
Gearing is a measure used to monitor levels of debt capital used by the business to fund its operations. This ratio is calculated as
interest-bearing debt drawn (excluding hedged foreign exchange and interest rate movements subsequent to the related debt drawing
date) net of cash, divided by total assets net of cash and derivative assets.
The gearing ratio of the Charter Hall Group at 30 June 2024 was 3.0% (30 June 2023: 2.2%). Debt covenants are monitored regularly
to ensure compliance and reported to the debt provider on a six-monthly basis. The Group Treasurer is responsible for negotiating new
debt facilities and monitoring compliance with covenants.
14 Borrowings continued
(c)
Net debt reconciliation
This section sets out an analysis of net debt and the movements in net debt for each of the periods presented.
Movement
Movement
Opening
in fair in borrowing
Movement
Closing
balance
values
costs
in cash
balance
$'m
$'m
$'m
$'m
$'m
Charter Hall Group
2024
Borrowings
453.4
4.7
–
–
458.1
Derivative financial instruments hedging debt
18.8
0.1
–
–
18.9
Borrowing costs
(2.7)
–
0.1
–
(2.6)
Cash
(401.4)
–
–
18.7
(382.7)
68.1
4.8
0.1
18.7
91.7
2023
Borrowings
456.9
(3.5)
–
–
453.4
Loans - related parties
–
–
–
–
–
Derivative financial instruments hedging debt
13.9
4.9
–
–
18.8
Borrowing costs
(3.0)
–
0.3
–
(2.7)
Cash
(594.7)
–
–
193.3
(401.4)
(126.9)
1.4
0.3
193.3
68.1
Charter Hall Property Trust Group
2024
Borrowings
453.4
4.7
–
–
458.1
Derivative financial instruments hedging debt
18.8
0.1
–
–
18.9
Borrowing costs
(2.7)
–
0.1
–
(2.6)
Funding received from Charter Hall Limited
143.8
–
–
252.8
396.6
Cash
(56.1)
–
–
33.7
(22.4)
557.2
4.8
0.1
286.5
848.6
2023
Borrowings
456.9
(3.5)
–
–
453.4
Derivative financial instruments hedging debt
13.9
4.9
–
–
18.8
Borrowing costs
(3.0)
–
0.3
–
(2.7)
Funding received from Charter Hall Limited
–
–
–
143.8
143.8
Cash
(53.4)
–
–
(2.7)
(56.1)
414.4
1.4
0.3
141.1
557.2
109
108 Charter Hall Group Annual Report 2024 / Directors’ Report and Financial Report / Notes to the Consolidated Financial Statements
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15 Derivative financial instruments
Charter Hall Group
Charter Hall Property
Trust Group
2024
2023
2024
2023
$'m
$'m
$'m
$'m
Current assets
Cross-currency interest rate swaps - cash flow hedge and fair
value hedge
2.7
2.8
2.7
2.8
Interest rate swaps - fair value hedge
–
0.2
–
0.2
Interest rate swaps - fair value through profit and loss
–
1.8
–
1.8
Share purchase option - fair value through profit and loss1
1.4
–
–
–
4.1
4.8
2.7
4.8
Non-current assets
Cross-currency interest rate swaps - cash flow hedge and fair
value hedge
17.2
17.5
17.2
17.5
Share purchase option - fair value through profit and loss1
–
16.7
–
–
17.2
34.2
17.2
17.5
Non-current liabilities
Interest rate swaps - fair value hedge
38.2
41.1
38.2
41.1
38.2
41.1
38.2
41.1
1
Share purchase option to call remaining 50% of shares in Paradice Investment Management not presently owned by the Group.
Key valuation assumptions used in the determination of the fair value of derivative financial instruments and the Group’s valuation
policy are disclosed note 21(c) and 21(d).
16 Contributed equity
(a) Movements in ordinary stapled security capital
Weighted
Charter Hall
Number of
average
Charter Hall
Property
securities
issue price
Limited
Trust
Total
Details
$'m
$'m
$'m
Opening balance at 1 July 2022
472,997,199
314.8
1,538.0
1,852.8
Buyback and issuance of securities for exercised
performance and service rights1
–
$9.13
(0.7)
(1.8)
(2.5)
Tax recognised directly in equity
–
0.7
–
0.7
Closing balance at 30 June 2023
472,997,199
314.8
1,536.2
1,851.0
Closing balance per accounts at 30 June 2023
472,997,199
314.8
1,536.2
1,851.0
Buyback and issuance of securities for exercised
performance and service rights2
–
$10.99
–
0.1
0.1
Tax recognised directly in equity
–
0.2
–
0.2
Closing balance at 30 June 2024
472,997,199
315.0
1,536.3
1,851.3
Closing balance per accounts at 30 June 2024
472,997,199
315.0
1,536.3
1,851.3
1
645,142 stapled securities bought on-market at an average value of $12.97, offset by the exercise of 327,074 performance rights with a fair value of $7.10 and 318,068
service rights with an average value of $11.21.
2
1,152,418 stapled securities bought on-market at an average value of $10.85, offset by the exercise of 273,086 performance rights with a fair value of $7.01 and 879,332
service rights with an average value of $12.23.
(b) Ordinary stapled securities
Ordinary stapled securities are classified as equity. Incremental costs directly attributable to the issue of new stapled securities or
options are shown in equity as a deduction, net of tax, from the proceeds.
Ordinary stapled securities entitle the holder to participate in distributions/dividends and the proceeds on winding up of the
Company/Trust in proportion to the number of and amounts paid on the stapled securities held.
On a show of hands, every holder of ordinary stapled securities present at a meeting in person or by proxy is entitled to one vote and
upon a poll, each holder is entitled to one vote per security that they hold.
(c)
Distribution Reinvestment Plan
The Group has established a Distribution Reinvestment Plan (DRP) under which holders of ordinary stapled securities may elect to
have all or part of their distribution satisfied by the issue of new ordinary stapled securities rather than by being paid in cash. The DRP
was suspended for the distribution paid on 25 August 2016 and subsequent distributions.
17 Reserves
Charter Hall Group
Charter Hall Property
Trust Group
2024
2023
2024
2023
$'m
$'m
$'m
$'m
Business combination reserve
(52.0)
(52.0)
–
–
Security-based benefits reserve
53.7
52.1
–
–
Cash flow hedge reserve
3.2
4.0
2.8
4.0
Foreign currency basis reserve
(0.4)
–
(0.4)
–
Other reserves
0.8
0.8
–
(0.3)
5.3
4.9
2.4
3.7
Charter Hall Limited
2.9
1.2
–
–
Charter Hall Property Trust
2.4
3.7
2.4
3.7
5.3
4.9
2.4
3.7
(a) Business combination reserve
This reserve relates to the reverse acquisition at the initial public offering (IPO) in 2005. This is the amount that relates to the
investment in CHH that is not eliminated by paid-in capital. No goodwill is recognised as this transaction is the result of a reverse
acquisition.
(b) Security-based benefits reserve
The security based benefits reserve is used to recognise the fair value of rights and options issued under the Performance Rights and
Options Plan (PROP).
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110 Charter Hall Group Annual Report 2024 / Directors’ Report and Financial Report / Notes to the Consolidated Financial Statements
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18 Remuneration of auditors
During the year, the following fees were paid for services provided by the auditors of the Charter Hall Group and Charter Hall Property
Trust Group, their related practices and non-related audit firms:
Charter Hall Group
Charter Hall Property
Trust Group
2024
2023
2024
2023
$
$
$
$
(a) Audit services
PricewaterhouseCoopers – Australian Firm
Audit and review of financial and regulatory reports
541,355
511,364
23,453
18,812
Total remuneration for audit services
541,355
511,364
23,453
18,812
(b) Taxation services
PricewaterhouseCoopers – Australian Firm
Taxation compliance services
61,732
67,970
–
–
Total remuneration for taxation compliance services
61,732
67,970
–
–
(c) Other services
PricewaterhouseCoopers – Australian Firm
Sustainability assurance services
252,000
160,000
–
–
Other assurance services
–
13,178
–
13,178
Total remuneration for other services
252,000
173,178
–
13,178
19 Reconciliation of profit after tax to net cash inflow from operating activities
Charter Hall Group
Charter Hall Property
Trust Group
2024
2023
2024
2023
$'m
$'m
$'m
$'m
Profit/(loss) after tax for the year
(222.1)
196.1
(375.0)
(115.9)
Non-cash items:
Amortisation of intangibles
0.5
0.5
–
–
Impairment of associates
48.4
9.1
–
9.1
Depreciation and amortisation
12.6
9.4
0.6
0.6
Non-cash security-based benefits expense
17.1
12.6
–
–
Net (gain)/loss on sale of investments, property and derivatives
16.2
(0.5)
17.8
(0.6)
Fair value adjustments
(9.7)
(2.3)
(9.7)
(2.3)
Other net losses
8.8
0.9
–
–
Unrealised net (gains)/losses on derivative financial instruments
18.0
3.3
(2.7)
(0.1)
Foreign exchange movements
0.6
–
0.6
–
Change in assets and liabilities, net of effects from purchase of
controlled entity:
(Increase)/decrease in trade debtors and other receivables
47.5
(44.4)
(6.4)
14.0
Increase/(decrease) in trade creditors and accruals
(9.9)
(35.4)
21.6
(4.5)
Development assets net proceeds
71.4
0.9
–
–
Share of net losses from equity accounted investments in associates
and joint ventures
467.8
229.3
428.2
209.0
Increase/(decrease) in income taxes payable
(28.3)
(36.1)
–
–
Increase in net deferred income tax
(10.9)
(4.5)
–
–
Net cash inflow from operating activities
428.0
338.9
75.0
109.3
Distributions and interest income received on investments has been classified as cash flow from operating activities.
20 Capital and financial risk management
(a)
Capital risk management
The key capital risk management objective of the Group and CHPT is to optimise returns through the mix of available capital sources
whilst complying with statutory and constitutional capital requirements and complying with the covenant requirements of the finance
facilities. The capital management approach is regularly reviewed by management and the Board as part of the overall strategy. The
capital mix can be altered by issuing new units, electing to have the DRP underwritten, adjusting the amount of distributions paid,
activating a stapled security buyback program or selling assets.
(b)
Financial risk management
Both the Group and CHPT activities expose it to a variety of financial risks: market risk (price risk, interest rate risk and foreign
exchange risk), credit risk and liquidity risk. The Group’s overall risk management framework focuses on the unpredictability of financial
markets and seeks to minimise potential adverse effects on the financial performance of the Group. From time to time, the Group uses
derivative financial instruments such as interest rate swaps and option contracts to hedge certain risk exposures.
Risk management is carried out by the Group Treasurer, the Chief Financial Officer and the Managing Director and Group CEO in
consultation with senior management, the Audit, Risk and Compliance Committee and the Board of Directors. The Group Treasurer
identifies, evaluates and hedges financial risks in close cooperation with the Chief Financial Officer. The Board provides guidance for
overall risk management, as well as covering specific areas, such as mitigating price, interest rate and credit risks, the use of derivative
financial instruments and investing excess liquidity.
(i)
Market risk
Unlisted unit price risk
The Group is exposed to unlisted unit price risk. This arises from investments in unlisted property funds managed by the Group. These
funds invest in direct property. Charter Hall manages all the funds that the Group invests in and its executives have a sound
understanding of the underlying property values and trends that give rise to price risk. The carrying value of investments in associates
at fair value through profit or loss is measured with reference to the funds’ unit prices which are determined in accordance with the
funds’ respective constitutions. The key determinant of the unit price is the underlying property values which are approved by the
respective fund board or investment committee and the Executive Property Valuation Committee.
113
112 Charter Hall Group Annual Report 2024 / Directors’ Report and Financial Report / Notes to the Consolidated Financial Statements
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20 Capital and financial risk management continued
The following table illustrates the potential impact a change in unlisted unit prices by ±10% would have on the Group and CHPT’s
profit. The movement in the price variable has been determined based on management’s best estimate, having regard to a number of
factors, including historical levels of price movement, historical correlation of the Group’s investments with the relevant benchmark and
market volatility. However, actual movements in the price may be greater or less than anticipated due to a number of factors. As a
result, historic price variations are not a definitive indicator of future price variations.
10%
Carrying
Impact on
amount
Profit1
$'m
$'m
Charter Hall Group
2024
Assets – Charter Hall Group
Investments accounted for at fair value through profit or loss
53.0
5.3
Investments in financial assets at fair value through profit or loss
20.1
2.0
Assets held for sale
78.8
7.9
2023
Assets – Charter Hall Group
Investments accounted for at fair value through profit or loss
66.6
6.7
Investments in financial assets at fair value through profit or loss
29.7
3.0
Charter Hall Property Trust Group
2024
Assets – Charter Hall Property Trust Group
Investments accounted for at fair value through profit or loss
53.0
5.3
Investments in financial assets at fair value through profit or loss
20.1
2.0
Assets held for sale
78.8
7.9
2023
Assets – Charter Hall Property Trust Group
Investments accounted for at fair value through profit or loss
66.6
6.7
Investments in financial assets at fair value through profit or loss
29.7
3.0
1 The impact of a -10% change is the reverse of the impact shown for a +10% change.
Cash flow and fair value interest rate risk
The Group has long-term interest-bearing assets from unsecured loans receivable from development partners of $4.0 million. This
exposure is not considered to be material to the Group.
The Group’s and CHPT’s external interest rate risk arises from the debt facilities disclosed in Note 14. Borrowings drawn at variable
rates expose both the Group and CHPT to cash flow interest rate risk. Borrowings drawn at fixed rates expose both the Group and
CHPT to fair value interest rate risk. The Group and CHPT monitor interest rate risk regularly and in accordance with the Charter Hall
Treasury Risk Management Policy and perform associated stress testing. Core borrowings are defined as being the level of borrowings
that are expected to be held for a period of more than two years.
(ii)
Interest rate risk exposure
The Group’s and CHPT’s external interest rate risk arises from the cash, debt facilities and associated derivatives disclosed in Note 14
bearing a variable interest rate.
20 Capital and financial risk management continued
Interest rate sensitivity analysis
The following tables illustrate the potential impact a change in interest rates of ±1% would have on the Group and CHPT’s profit, with
all other variables remaining constant.
+/-1%
Effective
Carrying
Impact on
interest rate
Fair value
amount
Profit
$'m
$'m
$'m
Charter Hall Group
2024
Financial assets
Cash and cash equivalents
4.4%
382.7
382.7
3.8/(3.8)
Investments accounted for at fair value through profit or loss
11.3%
36.2
36.2
0.4/(0.4)
Financial liabilities
Borrowings
6.1%
452.7
458.1
(4.6)/4.7
Total increase/(decrease)
(39.2)
(0.4)/0.5
2023
Financial assets
Cash and cash equivalents
2.9%
401.4
401.4
4.0/(4.0)
Derivative financial instruments
3.7%
1.8
1.8
0.0/(0.0)
Investments accounted for at fair value through profit or loss
11.2%
57.0
57.0
0.6/(0.6)
Financial liabilities
Borrowings
4.6%
440.6
453.4
(4.6)/4.7
Total increase/(decrease)
(62.0)
0.0/0.1
Charter Hall Property Trust Group
2024
Financial assets
Cash and cash equivalents
4.4%
22.4
22.4
0.2/(0.2)
Investments accounted for at fair value through profit or loss
11.3%
36.2
36.2
0.4/(0.4)
Financial liabilities
Loan payable to Charter Hall Ltd
5.4%
396.6
396.6
(4.0)/4.0
Borrowings
6.1%
452.7
458.1
(4.6)/4.7
Total increase/(decrease)
(796.1)
(8.0)/8.1
2023
Financial assets
Cash and cash equivalents
2.9%
56.1
56.1
0.6/(0.6)
Derivative financial instruments
3.7%
1.8
1.8
0.0/(0.0)
Investments accounted for at fair value through profit or loss
11.2%
57.0
57.0
0.6/(0.6)
Financial liabilities
Loan payable to Charter Hall Ltd
5.4%
143.8
143.8
1.4/(1.4)
Borrowings
4.6%
440.6
453.4
(4.6)/4.7
Total increase/(decrease)
–
(2.0)/2.1
The fair value of interest-bearing liabilities is inclusive of costs which would be incurred on settlement of a liability, and is based upon
market prices, where a market exists, or by discounting the expected future cash flows by the current interest rates for liabilities with
similar risk profiles.
The effect of changes in interest rates on the Group’s and CHPT’s profit shown in the table above is mainly impacted by a change in
interest payable on floating rate interest, offset by changes in the fair value of derivative financial instruments hedging this exposure.
(iii) Foreign exchange risk
The Group and CHPT’s principal exposure to foreign exchange risk arises from its investments in foreign subsidiaries and exposure to
bond issuances denominated in US dollars. The major asset held by foreign subsidiaries is cash in foreign denominated bank
accounts. Cross-currency swaps are used to convert US dollar borrowings into Australian dollar exposure.
115
114 Charter Hall Group Annual Report 2024 / Directors’ Report and Financial Report / Notes to the Consolidated Financial Statements
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20 Capital and financial risk management continued
(iv) Hedge accounting of derivatives
Where all relevant criteria are met, hedge accounting is applied to remove the accounting mismatch between the hedging instrument
and the hedged item. See Note 15 for derivatives held by the Group.
The Group’s accounting policy for its fair value and cash flow hedges is set out in Note 31(m).
Hedge effectiveness is determined at the inception of the hedge relationship, and through periodic prospective effectiveness
assessments to ensure that an economic relationship exists between the hedged item and hedging instrument.
The Group hedges 100% of its foreign-denominated debt and fixed-rate medium-term note. The Group enters into cross-currency
interest rate swaps and interest rate swaps that have critical terms that match the hedged item, such as payment dates, maturities and
notional amount. The Group uses the hypothetical derivative method to assess effectiveness. Hedge ineffectiveness may occur due to
credit/debit value adjustments and differences in critical terms between the hedging instrument and the hedged item.
Hedging instruments used by the Group
Cross-currency interest rate swaps currently in place cover 100% (2023: 100%) of the foreign-denominated debt outstanding. The
variable AUD interest rate payable under the swaps is 2.0% (2023: 2.0%) above the 90-day bank bill swap rate which at the end of the
reporting period was 4.3% (2023: 4.4%) and the receivable USD fixed rate aligns with the foreign-denominated debt at 4.6% (2023:
4.6%).
Interest rate swaps currently in place for the medium-term notes cover 100% (2023: 100%) of the debt outstanding. The receivable
fixed rate of the swaps is 3.1% (2023: 3.1%) and the payable is the 90-day bank bill swap rate plus 1.5% (2023: 1.5%).
See Note 14(a) for further details of swaps held by the Group.
Effects of hedge accounting on the financial position and performance
The effects of the cross-currency interest rate swaps and interest rate swaps on the Group’s financial position and performance are as
follows:
Charter Hall Group
Charter Hall Property
Trust Group
2024
2023
2024
2023
Cross-currency interest rate swaps
Carrying amount
19.9
20.3
19.9
20.3
Notional amount
231.5
231.5
231.5
231.5
Maturity date
August-2028 August-2028
August-2028 August-2028
Hedge ratio¹
1:1
1:1
1:1
1:1
Change in fair value of outstanding hedging instruments since 1 July
(0.4)
(5.0)
(0.4)
(5.0)
Change in value of hedged item used to determine hedge effectiveness
(0.5)
4.2
(0.5)
4.2
Interest rate swaps
Carrying amount
(38.2)
(40.9)
(38.2)
(40.9)
Notional amount
250.0
250.0
250.0
250.0
Maturity date
April-2031
April-2031
April-2031
April-2031
Hedge ratio¹
1:1
1:1
1:1
1:1
Change in fair value of outstanding hedging instruments since 1 July
2.7
(1.7)
2.7
(1.7)
Change in value of hedged item used to determine hedge effectiveness
(4.0)
(0.7)
(4.0)
(0.7)
1 The underlying rate on the swaps is the same as the rate exposure on the debt, therefore the hedge ratio is 1:1.
20 Capital and financial risk management continued
(c)
Credit risk
The Group and CHPT have policies in place to ensure that sales of services are made to customers with appropriate credit histories to
minimise risk of default. A default is when the counterparty fails to fulfil its obligations under the terms of the financial asset causing
financial loss to the Group and CHPT.
The Group derives 96.8% of its revenue from management fees, development revenue, transaction and other fees from related parties.
CHPT derives 69.6% of its revenue from distributions and other fees from investments in related party property funds.
Where appropriate, tenants in the underlying property funds for the Group and CHPT are assessed for creditworthiness, taking into
account their financial position, past experience and other factors. Refer to Note 9(c) for more information on credit risk.
Derivative counterparties and cash transactions are limited to high credit quality financial institutions. The Group and CHPT have
policies that limit the amount of credit exposure to any one financial institution.
The Group and CHPT applies the AASB 9 simplified approach to measuring expected credit losses, which involves a lifetime expected
loss allowance for trade receivables and financial assets at fair value through other comprehensive income or through profit or loss.
The Group considers its financial asset balances to be low risk and thus the methodology has not resulted in the recognition of an
impairment of any financial assets.
The loss allowances for trade and other financial assets are based on assumptions about risk of default and expected loss rates. The
Group uses judgement in making these assumptions, based on the Group’s history, existing market conditions and forward looking
estimates at the end of each reporting period.
(d) Liquidity risk
Prudent liquidity risk management involves maintaining sufficient cash and undrawn debt funding to meet all funding commitments.
Maturities of financial liabilities
The following table provides the contractual maturity of the Group’s and CHPT’s financial liabilities. The amounts presented represent
the future contractual undiscounted principal and interest cash flows and therefore do not equate to the value shown in the balance
sheet. Repayments which are subject to notice are treated as if notice were given immediately.
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116 Charter Hall Group Annual Report 2024 / Directors’ Report and Financial Report / Notes to the Consolidated Financial Statements
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20 Capital and financial risk management continued
Between
Carrying
Less than
one and
Over
Total cash
amount
one year
five years
five years
flows
$'m
$'m
$'m
$'m
$'m
Charter Hall Group
2024
Trade and other payables
219.2
212.4
1.8
5.0
219.2
Borrowings
458.1
5.7
475.1
–
480.8
Development liabilities
35.5
7.8
16.0
11.7
35.5
Derivative financial instruments
Net contractual amounts payable/(receivable)
38.2
7.2
26.2
13.5
46.9
Total financial liabilities
751.0
233.1
519.1
30.2
782.4
2023
Trade and other payables
213.9
209.2
1.7
3.0
213.9
Borrowings
453.4
–
–
481.5
481.5
Derivative financial instruments
–
–
–
–
–
Net contractual amounts payable/(receivable)
41.1
7.1
24.4
19.4
50.9
Total financial liabilities
708.4
216.3
26.1
503.9
746.3
Charter Hall Property Trust Group
2024
Trade and other payables
419.0
22.4
–
396.6
419.0
Borrowings
458.1
5.7
475.1
–
480.8
Derivative financial instruments
Net contractual amounts payable/(receivable)
38.2
7.2
26.2
13.5
46.9
Total financial liabilities
915.3
35.3
501.3
410.1
946.7
2023
Trade and other payables
206.6
62.8
–
143.8
206.6
Borrowings
453.4
–
–
481.5
481.5
Derivative financial instruments
–
–
–
–
–
Net contractual amounts payable/(receivable)
41.1
7.1
24.4
19.4
50.9
Total financial liabilities
701.1
69.9
24.4
644.7
739.0
Offsetting financial assets and liabilities
The Group is a party to a master agreement as published by International Swaps and Derivative Associates, Inc. (ISDA) which allows
the Group’s counterparties, under certain conditions (i.e. event of default), to set off the position owing/receivable under a derivative
contract to a net position outstanding. As at 30 June 2024, there was a net liability position of $18.9 million (2023: $18.8 million) with no
amounts subject to offset.
As the Group does not have a legally enforceable right to offset, none of the financial assets or financial liabilities are offset on the
balance sheet of the Group.
21 Fair value measurement
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes.
A fair value measurement of a non-financial asset takes into account the Group’s ability to generate economic benefits by using the
asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The fair value of financial instruments traded in active markets is determined using quoted market prices at the balance date. The
quoted market price used for financial assets held by the Group is the current bid price; the appropriate quoted market price for
financial liabilities is the current ask price.
The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. The Group uses
a variety of methods and makes assumptions that are based on market conditions existing at each balance date. Other techniques,
such as estimated discounted cash flows, are used to determine fair value for the remaining financial instruments.
(a) Recognised fair value measurement
The Charter Hall Group and the Charter Hall Property Trust Group measure and recognise the following assets and liabilities at fair
value on a recurring basis:
‒
Investments in associates at fair value through profit or loss (Note 2)
‒
Investments in joint ventures at fair value through profit or loss (Note 3)
‒
Financial assets at fair value through profit or loss
21 Fair value measurement continued
‒
Derivatives (Note 15)
AASB 13 Fair Value Measurement requires disclosure of fair value measurements by level of the following fair value measurement
hierarchy:
(i)
Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities;
(ii)
Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (as
prices) or indirectly (derived from prices); and
(iii)
Level 3 – Inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The following table presents the Charter Hall Group’s and Charter Hall Property Trust Group’s assets and liabilities measured and
recognised at fair value:
Level 1
Level 2
Level 3
Total
$'m
$'m
$'m
$'m
Charter Hall Group
2024
Financial assets at fair value through profit or loss
–
20.1
–
20.1
Investments in joint ventures at fair value through profit or loss
–
–
36.2
36.2
Investments in associates at fair value through profit or loss
–
–
53.0
53.0
Derivative financial instruments
–
19.9
1.4
21.3
Assets classified as held for sale
–
–
78.8
78.8
Total assets
–
40.0
169.4
209.4
Derivative financial instruments
–
(38.2)
–
(38.2)
Total liabilities
–
(38.2)
–
(38.2)
2023
Financial assets at fair value through profit or loss
–
29.7
–
29.7
Investments in joint ventures at fair value through profit or loss
–
–
57.0
57.0
Investments in associates at fair value through profit or loss
–
–
66.6
66.6
Derivative financial instruments
–
22.3
16.7
39.0
Total assets
–
52.0
140.3
192.3
Derivative financial instruments
–
(41.1)
–
(41.1)
Total liabilities
–
(41.1)
–
(41.1)
Charter Hall Property Trust Group
2024
Financial assets at fair value through profit or loss
–
20.1
–
20.1
Investments in joint ventures at fair value through profit or loss
–
–
36.2
36.2
Investments in associates at fair value through profit or loss
–
–
53.0
53.0
Derivative financial instruments
–
19.9
–
19.9
Assets classified as held for sale
–
–
78.8
78.8
Total assets
–
40.0
168.0
208.0
Derivative financial instruments
–
(38.2)
–
(38.2)
Total liabilities
–
(38.2)
–
(38.2)
2023
Financial assets at fair value through profit or loss
–
29.7
–
29.7
Investments in joint ventures at fair value through profit or loss
–
–
57.0
57.0
Investments in associates at fair value through profit or loss
–
–
66.6
66.6
Derivative financial instruments
–
22.3
–
22.3
Total assets
–
52.0
123.6
175.6
Derivative financial instruments
–
(41.1)
–
(41.1)
Total liabilities
–
(41.1)
–
(41.1)
There have been no transfers between Level 1, Level 2 and Level 3 during the period.
(b) Disclosed fair values
The carrying amounts of current trade receivables and payables approximate their fair values due to their short-term nature. The fair
value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market
interest rate that is available to the Charter Hall Group and Charter Hall Property Trust Group for similar financial instruments. The fair
value of the US unsecured notes is A$253.5m (30 June 2023: $246.2m) and the fair value of the unsecured MTN is A$211.3m (30
June 2023: $207.2m).
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21 Fair value measurement continued
(c)
Valuation techniques used to derive Level 2 fair values
Derivatives
Derivatives are classified as Level 2 on the fair value hierarchy as the inputs used to determine fair value are observable market data
but not quoted prices.
The fair value of cross-currency interest rate swaps is determined using forward foreign exchange market rates and forward interest
rates and the present value of the estimated future cash flows at the balance date.
The fair value of interest rate swaps is determined using forward interest rates and the present value of the estimated future cash flows
at the balance date.
Credit value adjustments are calculated based on the counterparty’s credit risk using the counterparty’s credit default swap curve as a
benchmark. Debit value adjustments are calculated based on the Group’s credit risk using debt financing available to the Group as a
benchmark.
Financial assets at fair value through profit or loss
Movements in fair value during the period have been recognised in the consolidated statement of comprehensive income. These
assets have been acquired with the intention of being long-term investments. Where the assets in this category are expected to be sold
within 12 months, they are classified as current assets; otherwise they are classified as non-current.
The fair value of investments in joint ventures held at fair value through profit or loss, which are investments in unlisted securities, are
determined by giving consideration to the unit prices and net assets of the underlying funds. The unit prices and net asset values are
largely driven by the fair values of investment properties and derivatives held by the funds. Recent arm’s length transactions, if any, are
also taken into consideration.
The fair value of investments in joint ventures at fair value through profit or loss is impacted by the price per security of the investment.
An increase to the price per security results in an increase to the fair value of the investment.
(d) Valuation techniques used to derive Level 3 fair values
Investments in associates
Certain unlisted property securities have been designated on initial recognition to be treated at fair value through profit or loss.
Movements in fair value during the period have been recognised in the consolidated statement of comprehensive income. These
assets have been acquired with the intention of being long-term investments. Where the assets in this category are expected to be sold
within 12 months, they are classified as current assets; otherwise they are classified as non-current.
The fair value of investments in associates held at fair value through profit or loss, which are investments in unlisted securities, are
determined by giving consideration to the unit prices and net assets of the underlying funds. The unit prices and net asset values are
largely driven by the fair values of investment properties and derivatives held by the funds. Recent arm’s length transactions, if any, are
also taken into consideration.
The fair value of investments in associates at fair value through profit or loss is impacted by the price per security of the investment. An
increase to the price per security results in an increase to the fair value of the investment.
Investments in joint ventures
The level 3 investment in joint ventures at fair value through profit or loss relates to a contractually linked instrument (CLI). The CLI is
designated on initial recognition to be treated at fair value through profit or loss.
The fair value of the CLI is primarily determined by reference to the credit risk of the tranche that the group holds directly. The
underlying pool of instruments pay floating interest as does the tranche that the group holds directly.
Derivatives
The level 3 derivative relates to a share purchase option to call the remaining 50% of Paradice Investment Management (PIM) shares
not yet acquired by the Group. The PIM share purchase option is designated on initial recognition to be treated at fair value through
profit or loss. Movements in fair value during the period have been recognised in the consolidated statement of comprehensive income.
The fair value of the PIM share purchase option is determined using the Black-Scholes methodology.
The Group cannot sell the PIM share purchase option and should the option not be exercised or the Group otherwise elect to forfeit this
right, 100% of the carrying value will be written off as a loss on derecognition in the statement of comprehensive income.
Look-through Investment property
The use of independent external valuers is on a rotational basis at least once every 12 months, or earlier, where the Responsible Entity
deems it appropriate or believes there may be a material change in the carrying value of the property. Refer to Responsible Entities as
disclosed in Note 22. Independent external valuations were conducted on 76% of investment property as at 30 June 2024 on a look-
through basis and 88% of investment property carrying values from March 2024 to June 2024.
21 Fair value measurement continued
Movements in the inputs are likely to have an impact on the fair value of investment properties. An increase/(decrease) in gross market
rent will likely lead to an increase/(decrease) in fair value. A decrease/(increase) in adopted capitalisation rate, adopted terminal yield
or adopted discount rate will likely lead to an increase/(decrease) in fair value.
Where an independent valuation is not obtained, the fair value is determined using discounted cash flow and income capitalisation
methods.
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120 Charter Hall Group Annual Report 2024 / Directors’ Report and Financial Report / Notes to the Consolidated Financial Statements
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22 Related parties
(a)
Parent entity
The parent entity of the Charter Hall Group is Charter Hall Limited. The parent entity of the Charter Hall Property Trust Group is the
Charter Hall Property Trust.
(b)
Controlled entities
Interests in controlled entities are set out in Note 23.
(c)
Key management personnel
Below are the aggregate amounts paid or payable to key management personnel (including Non-Executive Directors):
Charter Hall Group
Charter Hall Property
Trust Group
2024
2023
2024
2023
$'000
$'000
$'000
$'000
Salary and fees
3,421
3,214
–
–
Non-Executive Director remuneration
1,863
1,518
–
–
Short-term incentives
4,018
4,761
–
–
Superannuation
85
76
–
–
PROP accounting fair value expense
6,005
5,821
–
–
Non-monetary benefits
2
2
–
–
Termination benefits
29
–
–
–
15,423
15,392
–
–
Detailed remuneration disclosures are provided in the Remuneration Report on pages 54 to 79.
(d) Transactions with related parties
The following income was earned from related parties during the year:
Charter Hall Group
Charter Hall Property
Trust Group
2024
2023
2024
2023
$'000
$'000
$'000
$'000
Associates
Accounting cost recoveries
17,153
15,706
–
–
Marketing cost recoveries
4,589
5,253
–
–
Transaction and performance fees
54,750
146,045
–
–
Management and development fees
278,011
254,741
–
–
Property management fees and cost recoveries
110,918
99,049
–
–
Development revenue
16,488
204,599
–
–
Distributions received
89,707
98,211
84,140
92,901
Joint ventures
Accounting cost recoveries
2,051
2,356
–
–
Marketing cost recoveries
344
471
–
–
Transaction and performance fees
1,145
5,514
–
–
Management and development fees
31,878
47,774
–
–
Property management fees and cost recoveries
12,545
20,975
–
–
Development revenue
11,689
9,071
–
–
Distributions received
44,340
57,600
19,786
22,500
Other
Accounting cost recoveries
2,437
1,396
–
–
Marketing cost recoveries
441
146
–
–
Transaction and performance fees
1,101
14,158
–
–
Management and development fees
8,739
19,155
–
–
Property management fees and cost recoveries
9,062
3,576
–
–
Investment-related revenue
–
–
17,352
17,461
Development revenue
13,136
3,263
–
–
710,524
1,009,059
121,278
132,862
22 Related parties continued
During the year, the Group sold holdings in related party entities to other related parties totalling $1.0 million (2023: $99.7 million) and
purchased holdings in related party entities from related party entities totalling $39.0 million (2023: $nil).
The following balances arising through the normal course of business were due from related parties at balance date:
Charter Hall Group
Charter Hall Property
Trust Group
2024
2023
2024
2023
$'000
$'000
$'000
$'000
Associates
Investment management revenue receivables
57,090
78,243
–
–
Other receivables
4,438
10,074
–
–
Distributions receivable
23,167
26,627
21,864
25,113
Joint ventures
Investment management revenue receivables
6,319
11,076
–
–
Other receivables
482
1,272
–
–
Distributions receivable
8,248
7,429
6,546
5,157
Other
Investment management revenue receivables
2,180
2,010
–
–
Other receivables
2,802
374
–
–
104,726
137,105
28,410
30,270
(e)
Loans to/(from) related parties
Charter Hall Group
Charter Hall Property
Trust Group
2024
2023
2024
2023
$'000
$'000
$'000
$'000
Loans to joint ventures
Opening balances
3,659
3,408
–
–
Loan repayments received
–
(32)
–
–
Interest received/receivable
304
283
–
–
Closing balance
3,963
3,659
–
–
Closing balance
–
–
–
–
Loans from other related parties
Opening balances
11,000
–
–
Loan repayments made
(5,500)
(5,500)
–
–
Interest charged
552
1,594
–
–
Interest paid/payable
(552)
(1,594)
–
–
Closing balance
–
5,500
–
–
Loans to/(from) Charter Hall Limited
Opening balances
–
–
(143,825)
–
Loans advanced
–
–
245,132
249,242
Loan repayments received
–
–
(478,089)
(388,268)
Interest payable
–
–
(19,791)
(4,799)
Closing balance
–
–
(396,573)
(143,825)
No provisions for expected credit losses have been raised in relation to any outstanding balances.
(f)
Fees paid to the Responsible Entity or its associates
Fees paid to the Responsible Entity of the Charter Hall Property Trust, and its associates, by the Charter Hall Property Trust Group
amounted to $2,852,000 (2023: $2,951,000). At 30 June 2024, related fees payable amounted to $676,000 (2023: $624,000).
5,500
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23 Controlled entities
(a) Critical judgements
The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and
has the ability to affect those returns through its power over the entity. Critical judgements are made in assessing whether an investee
entity is controlled or subject to significant influence or joint control. These judgements include an assessment of the nature, extent and
financial effects of the Group’s interest in investee entities, including the nature and effects of its contractual relationship with the entity
or with other investors.
(b) Principal controlled entities
The Group’s principal subsidiaries where the majority of activities are undertaken as at 30 June 2024 are set out below. The country of
incorporation or registration is also their principal place of business, unless otherwise stated.
Country of
Class of
2024
2023
Name of entity
incorporation
Principal activity
securities
%
%
Controlled entities of Charter Hall Limited
Charter Hall Holdings Pty Limited
Australia
Funds management
Ordinary
100
100
Charter Hall Opportunity Fund No. 5
Australia
Development investment Ordinary
93
93
Charter Hall Social Infrastructure Limited
Australia
Responsible entity
Ordinary
100
100
Charter Hall Direct Property Management Limited
Australia
Funds management
Ordinary
100
100
Charter Hall FLK Funds Management Limited
Australia
Responsible entity
Ordinary
100
100
Charter Hall Investment Management Limited
Australia
Responsible entity
Ordinary
100
100
Charter Hall Retail Management Limited
Australia
Responsible entity
Ordinary
100
100
Charter Hall WALE Limited
Australia
Responsible entity
Ordinary
100
100
Charter Hall Wholesale Management Limited
Australia
Responsible entity
Ordinary
100
100
Charter Hall Development Services Pty Ltd
Australia
Property development
Ordinary
100
100
Charter Hall Opportunity Fund No. 6
Australia
Property development
Ordinary
100
100
Controlled entities of Charter Hall Property Trust
Charter Hall Co-Investment Trust
Australia
Property investment
Ordinary
100
100
Charter Hall Co-Investment Trust 2
Australia
Property investment
Ordinary
100
100
Charter Hall Co-Investment Trust 3
Australia
Property investment
Ordinary
100
100
Charter Hall Co-Investment Trust 4
Australia
Property investment
Ordinary
100
100
Charter Hall Co-Investment Trust 6
Australia
Property investment
Ordinary
100
100
Charter Hall Co-Investment Trust 7
Australia
Property investment
Ordinary
100
100
Charter Hall Co-Investment Trust 9
Australia
Property investment
Ordinary
100
100
CHPT Exchange Trust
Australia
Property investment
Ordinary
100
100
CHC Finance Pty Ltd
Australia
Financing entity
Ordinary
100
100
Charter Hall Co-Investment Trust 10
Australia
Property investment
Ordinary
100
100
Charter Hall Co-Investment Trust 11
Australia
Property investment
Ordinary
100
100
Charter Hall Co-Investment Trust 12
Australia
Property investment
Ordinary
100
100
Charter Hall Co-Investment Trust 13
Australia
Property investment
Ordinary
100
100
Charter Hall Co-Investment Trust 15
Australia
Property investment
Ordinary
100
100
Charter Hall Co-Investment Trust 16
Australia
Property investment
Ordinary
100
100
Charter Hall Co-Investment Trust 17
Australia
Property investment
Ordinary
100
100
Charter Hall Co-Investment Trust 18
Australia
Property investment
Ordinary
100
100
Charter Hall Co-Investment Trust 19
Australia
Property investment
Ordinary
100
100
24 Interests in unconsolidated structured entities
The Charter Hall Group considers its investments in associates and joint ventures to be unconsolidated structured entities, on the basis
that the Group’s voting rights are not the sole factor in determining whether control over an entity exists. Where the Group determines
that control over an entity does not exist, the entity is recognised as an associate or joint venture of the Group for reporting purposes.
The activities and objectives of the unconsolidated structured entities of the Group include property investment for annuity income and
medium to long-term capital growth and/or development profit.
The aggregate of all the Group’s interests and maximum exposure to loss in unconsolidated structured entities, being the Group’s
interests in associates and joint ventures, are included in the table below:
Charter Hall Group
Charter Hall Property
Trust Group
2024
2023
2024
2023
$'m
$'m
$'m
$'m
Current assets
Trade receivables
71.6
109.2
–
–
Distributions receivable
31.4
34.0
28.4
30.2
Total current assets
103.0
143.2
28.4
30.2
Non-current assets
Loans to related parties
4.0
3.7
–
–
Investments at fair value through profit or loss
73.2
96.3
73.2
96.3
Investments accounted for using the equity method
2,772.6
3,066.7
2,421.3
2,621.4
Intangible Assets
103.1
103.5
–
–
Total non-current assets
2,952.9
3,270.2 –
2,494.5
2,717.7
Total carrying amount of interests in unconsolidated structured
entities
3,055.9
3,413.4
2,522.9
2,747.9
Total funds under management in unconsolidated structured
entities
73,357.8
75,660.4
57,883.8
59,961.7
There are no additional arrangements that would expose the Charter Hall Group or Charter Hall Property Trust Group to losses beyond
the carrying amounts.
During the year, the Charter Hall Group earned fees from structured entities in its capacity as investment manager. Refer to Note 22 for
further information.
No financial support has been provided to the funds beyond the loans disclosed in the above table.
25 Commitments
(a) Capital commitments
Charter Hall Group
The Group had no disclosable contracted capital commitments as at 30 June 2024 (2023: $nil).
Charter Hall Property Trust Group
The Trust Group had no disclosable contracted capital commitments as at 30 June 2024 (2023: $nil).
26 Contingent liabilities
The Group has nil contingent liabilities as at 30 June 2024 (2023: $nil) other than the bank guarantees provided for under the bank
facility held by Charter Hall Property Trust (refer to 14(a)).
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124 Charter Hall Group Annual Report 2024 / Directors’ Report and Financial Report / Notes to the Consolidated Financial Statements
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27 Security-based benefits expense
(a) Charter Hall – Performance Rights and Options Plan (PROP)
Charter Hall Group and
2020
2021
2022
2023
2024
Total
Charter Hall Property Trust Group
Number
Number
Number
Number
Number
Number
Performance rights
Rights issued 25/11/19
713,588
–
–
–
–
713,588
Rights issued 26/11/20
–
838,798
–
–
–
838,798
Rights issued 11/09/21
–
–
4,094,224
–
–
4,094,224
Rights issued 11/11/21
–
–
905,776
–
–
905,776
Rights issued 14/12/21
–
–
794,630
–
–
794,630
Rights issued 17/11/22
–
–
–
489,835
–
489,835
Rights issued 17/11/22
–
–
–
489,835
–
489,835
Rights issued 07/12/23
–
–
–
–
588,491
588,491
Rights issued 07/12/23
–
–
–
–
588,491
588,491
Performance rights issued
713,588
838,798
5,794,630
979,670
1,176,982
9,503,668
Number of rights forfeited/lapsed
Prior years
(74,430)
(129,747)
(104,458)
(16,006)
–
(324,641)
Current year
–
(17,347)
(28,408)
(40,872)
(29,218)
(115,845)
Number of rights vested
Prior years
(327,074)
–
–
–
–
(327,074)
Current year
(312,084)
–
–
–
–
(312,084)
Closing balance
–
691,704
5,661,764
922,792
1,147,764
8,424,024
Service rights
Rights issued 01/07/19
178,903
–
–
–
–
178,903
Rights issued 28/11/19
320,000
–
–
–
–
320,000
Rights issued 01/07/20
–
672,282
–
–
–
672,282
Rights issued 01/07/20
–
319,856
–
–
–
319,856
Rights issued 27/07/21
–
–
319,650
–
–
319,650
Rights issued 27/07/21
–
–
156,280
–
–
156,280
Rights issued 29/07/22
–
–
–
284,654
–
284,654
Rights issued 29/07/22
–
–
–
449,667
–
449,667
Rights issued 05/12/22
–
–
–
25,818
–
25,818
Rights issued 16/08/23
–
–
–
–
385,837
385,837
Rights issued 29/01/24
–
–
–
–
157,728
157,728
Service rights issued
498,903
992,138
475,930
760,139
543,565
3,270,675
Number of rights forfeited/lapsed
Prior years
(45,000)
(12,621)
(8,324)
(10,222)
–
(76,167)
Current year
–
-
(3,812)
(28,249)
(33,462)
(65,523)
Number of rights vested
Prior years
(258,903)
(269,856)
(78,140)
(142,327)
–
(749,226)
Current year
(65,000)
(433,495)
(78,140)
(12,909)
(147,461)
(737,005)
Closing balance
130,000
276,166
307,514
566,432
362,642
1,642,754
Further detail regarding the vesting conditions are included in the remuneration report section of the Directors' report.
(b) PROP expense
Total expenses related to the PROP recognised during the year as part of employee benefit expense were as follows:
Charter Hall Group
Charter Hall Property
Trust Group
2024
2023
2024
2023
$'m
$'m
$'m
$'m
Performance rights and option plan
17.1
12.6
–
–
27 Security-based benefits expense continued
(c)
PROP Valuation Inputs
The Black-Scholes or Monte Carlo method, as applicable, is utilised for valuation and accounting purposes. The model inputs to assess
the fair value of the PROP rights granted during FY2024 are as follows:
CHC
CHC
CHC
CHC
Performance
Performance
Service
Service
rights
rights
rights –
rights –
Tranche 1
Tranche 2
Mandatory
Deferred STI
Voluntary
Deferred STI
Grant date
07/12/2023
07/12/2023
16/08/2023
16/08/2023
Stapled security price at grant date1
$10.68
$10.68
$10.29
$10.29
Fair value of right
$10.68
$6.71
$10.29
$10.29
Expected volatility2
39.7%
39.7%
33.5%
33.3%
Risk-free interest rate
3.9%
3.9%
3.9%
3.9%
CQR
CQE
CLW
CHC
Service
Service
Service
Service
rights –
rights –
rights –
rights –
Mandatory
Deferred STI
Mandatory
Deferred STI
Mandatory
Deferred STI
Sign-on
Rights
Grant date
16/08/2023
16/08/2023
16/08/2023
29/01/2024
Stapled security price at grant date1
$3.38
$2.63
$3.54
$11.59
Fair value of right
$3.38
$2.63
$3.54
$11.59
Expected volatility2
21.7%
28.5%
21.5%
33.2%
Risk-free interest rate
4.0%
4.0%
3.9%
3.8%
1
The grant date reflects the date the rights were allocated. Participants are eligible and performance period commences from 1 July of the relevant financial year for
performance rights.
2
Expected volatility takes into account historical market price volatility.
Further detail regarding the vesting conditions are included in the remuneration report section of the Directors' report.
(d) Charter Hall General Employee Security Plan (GESP)
During the year, eligible employees received up to $1,000 (2023: $1,000) in stapled securities which vested immediately on issue but
are held in trust until the earlier of the completion of three years’ service or termination. An expense of $499,460 (2023: $601,656) was
recognised in relation to this plan during the year. For the GESP, the cost of the stapled securities bought on-market to settle the award
liability is included in employee benefits expense.
(e) Accounting policy
Security-based benefits
Security-based compensation benefits are provided to employees via the Charter Hall Performance Rights and Options Plan (PROP)
and the General Employee Security Plan (GESP). For market-based performance rights, the fair value at grant date is independently
valued using a Monte Carlo simulation pricing model that takes into account the exercise price, the term of the rights, impact of dilution,
stapled security price at grant date, expected price volatility of the underlying stapled security, expected dividend yield and the risk-free
interest rate for the term of the rights and market vesting conditions, but excludes the impact of any non-market vesting conditions (for
example, profitability and sales growth targets). Non-market vesting conditions are included in assumptions about the number of rights
that are expected to vest. For non-market based performance rights, the fair value at grant date is independently valued using the
Black-Scholes methodology. At each reporting date, the entity revises its estimate of the number of rights that are expected to vest.
The employee benefits expense recognised each year takes into account the most recent estimate.
Upon the vesting of stapled securities, the balance of the stapled security-based benefits reserve relating to those stapled securities is
transferred to equity, net of any directly attributable transaction costs.
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126 Charter Hall Group Annual Report 2024 / Directors’ Report and Financial Report / Notes to the Consolidated Financial Statements
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28 Parent entity financial information
(a)
Summary financial information
The individual financial statements for the parent entity of the Charter Hall Group, being Charter Hall Limited, and the parent entity of
the Charter Hall Property Trust Group, being the Charter Hall Property Trust, have been prepared on the same basis as the Group’s
financial statements:
Charter Hall Limited
Charter Hall
Property Trust
2024
2023
2024
2023
Balance sheet
$'m
$'m
$'m
$'m
Current assets
471.6
327.9
41.0
74.8
Total assets
761.5
623.0
3,757.6
3,381.0
Current liabilities
141.7
94.6
21.8
62.8
Total liabilities
320.5
482.4
2,211.3
1,684.9
Shareholders' equity
Issued capital
315.0
314.8
1,536.4
1,536.2
Other reserves
(53.6)
(53.6)
2.4
3.3
Accumulated profit/(losses)
179.6
(120.6)
7.5
156.6
Net equity
441.0
140.6
1,546.3
1,696.1
Profit for the year
540.6
96.4
148.7
229.4
Total comprehensive income for the year
540.6
96.4
148.7
229.4
Charter Hall Property Trust has total net assets of $1.5 billion and liquidity through the inter-staple loan with Charter Hall Limited.
(b)
Contingent liabilities of the parent entity
Charter Hall Limited and Charter Hall Property Trust had no contingent liabilities as at 30 June 2024 (2023: $nil) other than the bank
guarantees provided for under the bank facility held by Charter Hall Property Trust (refer to Note 14(a)).
(c)
Contractual commitments
As at 30 June 2024, Charter Hall Limited had no contractual commitments (2023: $nil).
As at 30 June 2024, Charter Hall Property Trust had no contractual commitments (2023: $nil).
29 Deed of cross guarantee
Charter Hall Group
Charter Hall Limited (CHL) and its wholly owned subsidiaries, Charter Hall Holdings Pty Ltd (CHH) and Folkestone Limited (FLK), are
parties to a deed of cross guarantee under which each company guarantees the debts of the others. By entering into the deed, CHH
and FLK have been relieved from the requirement to prepare financial statements and a Directors’ report under ASIC Instrument
2016/785 issued by the Australian Securities and Investments Commission. FLK was added by assumption deed to the deed of cross
guarantee from 3 May 2019.
(a) Consolidated statement of comprehensive income and summary of movements in consolidated accumulated losses
The above companies represent a ‘closed group’ for the purposes of the Instrument and, as there are no other parties to the deed of
cross guarantee that are controlled by Charter Hall Limited, they also represent the ‘extended closed group’.
Set out as follows is a consolidated statement of comprehensive income and a summary of movements in consolidated accumulated
losses for the year of the closed group consisting of CHL, CHH and FLK.
2024
2023
$'m
$'m
Statement of comprehensive income
Revenue
616.1
614.2
Other net fair value adjustments
(15.3)
(3.3)
Employee benefits expense
(190.8)
(184.8)
Depreciation and amortisation
(11.5)
(8.2)
Finance costs
(15.1)
(5.0)
Share of net profit of associates accounted for using the equity
method
4.8
14.6
Other expenses
(93.1)
(38.3)
Profit before income tax
295.1
389.2
Income tax expense
(80.5)
(111.2)
Profit for the year
214.6
278.0
Accumulated profit at the beginning of the financial year
603.1
415.8
Profit for the year
214.6
278.0
Dividends paid/payable
(144.9)
(90.7)
Accumulated profit at the end of the financial year
672.8
603.1
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128 Charter Hall Group Annual Report 2024 / Directors’ Report and Financial Report / Notes to the Consolidated Financial Statements
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29 Deed of cross guarantee continued
(b) Balance sheet
Set out below is a consolidated balance sheet of the closed group consisting of CHL, CHH and FLK.
2024
2023
$'m
$'m
Assets
Current assets
Cash and cash equivalents
349.4
281.3
Receivables and other assets
91.7
128.5
Net loans receivable from related entities
68.0
35.6
Total current assets
509.1
445.4
Non-current assets
Loans due from Charter Hall Property Trust
396.6
143.8
Investment in associates at fair value through profit or loss
15.1
15.1
Investment in associates
167.2
225.9
Investments in controlled entities
204.1
203.5
Property, plant and equipment
10.4
14.1
Intangible assets
71.0
71.0
Right-of-use assets
12.6
16.1
Deferred tax assets
14.6
5.8
Derivative financial instruments
1.4
16.7
Total non-current assets
893.0
712.0
Total assets
1,402.1
1,157.4
Liabilities
Current liabilities
Trade and other liabilities
223.8
165.3
Lease liabilities
7.6
7.1
Total current liabilities
231.4
172.4
Non-current liabilities
Trade and other liabilities
5.0
4.7
Net loans due to related entities
140.0
20.8
Lease liabilities
11.4
16.4
Total non-current liabilities
156.4
41.9
Total liabilities
387.8
214.3
Net assets
1,014.3
943.1
Equity
Contributed equity
315.0
314.8
Reserves
26.5
25.2
Accumulated profit
672.8
603.1
Total equity
1,014.3
943.1
30 Events occurring after the reporting date
No matter or circumstance has arisen since 30 June 2024 that has significantly affected, or may significantly affect:
(a) The Group’s operations in future financial years; or
(b) The results of those operations in future financial years; or
(c) The Group’s state of affairs in future financial years.
31 Summary of material accounting policies
The material policies which have been adopted in the preparation
of these consolidated financial statements for the year ended 30
June 2024 are set out below. These policies have been
consistently applied to the years presented, unless otherwise
stated.
Changes in accounting policies
(a)
New and amended standards adopted
No new accounting standards or amendments have come into
effect for the year ended 30 June 2024 that materially affect the
Group’s operations or reporting requirements.
Certain amendments to accounting standards have been
published that are not mandatory for 30 June 2024 reporting
periods and have not been early adopted by the Group. These
amendments are not expected to have a material impact on the
Group in the current or future reporting periods and on
foreseeable future transactions.
Material accounting policies
(b)
Controlled entities
The Charter Hall Group (Group or CHC) is a ‘stapled’ entity
comprising Charter Hall Limited (Company or CHL) and its
controlled entities, and Charter Hall Property Trust (Trust) and its
controlled entities (CHPT Group). The shares in the Company are
stapled to the units in the Trust. The stapled securities cannot be
traded or dealt with separately. The stapled securities of the
Group are listed on the Australian Securities Exchange (ASX).
CHL has been identified as the parent entity in relation to the
stapling.
The two Charter Hall entities comprising the stapled Group
remain separate legal entities in accordance with the
Corporations Act 2001, and are each required to comply with the
reporting and disclosure requirements of Accounting Standards
and the Corporations Act 2001.
As permitted by ASIC Corporations (Stapled Group Reports)
Instrument 2015/838, this financial report is a combined financial
report that presents the consolidated financial statements and
accompanying notes of both the Charter Hall Group and the
Charter Hall Property Trust Group.
The financial report of the Charter Hall Group comprises CHL and
its controlled entities, including Charter Hall Funds Management
Limited (Responsible Entity) as responsible entity for CHPT and
CHPT and its controlled entities. The results and equity not
directly owned by CHL, of CHPT, have been treated and
disclosed as a non-controlling interest. Whilst the results and
equity of CHPT are disclosed as a non-controlling interest, the
stapled securityholders of CHL are the same as the stapled
securityholders of CHPT. The financial report of the Charter Hall
Property Trust Group comprises the Trust and its controlled
entities.
These general purpose financial statements have been prepared
in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards
Board and the Corporations Act 2001, and continue to be
prepared on the going concern basis of accounting. The Charter
Hall Group and Charter Hall Property Trust Group are for-profit
entities for the purpose of preparing the consolidated financial
statements.
On 6 June 2005, CHL acquired Charter Hall Holdings Pty Ltd
(CHH). Under the terms of AASB 3 Business Combinations, CHH
was deemed to be the accounting acquirer in this business
combination. This transaction was therefore accounted for as a
reverse acquisition under AASB 3. Accordingly, the consolidated
financial statements of the Group have been prepared as a
continuation of the consolidated financial statements of CHH.
CHH, as the deemed acquirer, acquisition accounted for CHL as
at 6 June 2005.
Group references in accounting policies
The accounting policies apply to both the Group and Charter Hall
Property Trust Group unless otherwise stated in the relevant
policy.
Compliance with IFRS
The consolidated financial statements of the Group also comply
with International Financial Reporting Standards (IFRS) as issued
by the International Accounting Standards Board (IASB).
Historical cost convention
The consolidated financial statements have been prepared on a
historical cost basis, except for the following:
‒
assets held for sale – measured at the lower of carrying
amount and fair value less costs to sell;
‒
investment properties – measured at fair value;
‒
investments in associates at fair value through profit or loss
– measured at fair value;
‒
investments in financial assets held at fair value – measured
at fair value; and
‒
derivative financial instruments.
(c)
Principles of consolidation
(i)
Controlled entities
The consolidated financial statements of the Charter Hall Group
and the Charter Hall Property Trust Group incorporate the assets
and liabilities of all controlled entities as at 30 June 2024 and their
results for the year then ended.
The Group controls an entity when the Group is exposed to, or
has rights to, variable returns from its involvement with the entity
and has the ability to affect those returns through its power to
direct the activities of the entity. Controlled entities are fully
consolidated from the date on which control is transferred to the
Group. They are deconsolidated from the date that control
ceases.
Intercompany transactions, balances and unrealised gains on
transactions between Group companies are eliminated.
Unrealised losses are also eliminated unless the transaction
provides evidence of an impairment of the transferred asset.
Accounting policies of controlled entities have been changed
where necessary to ensure consistency with the policies adopted
by the Group.
Non-controlling interests in the results and equity of controlled
entities are shown separately in the consolidated statement of
comprehensive income, consolidated balance sheet and
consolidated statement of changes in equity respectively.
131
130 Charter Hall Group Annual Report 2024 / Directors’ Report and Financial Report / Notes to the Consolidated Financial Statements
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31 Summary of material accounting policies continued
(ii)
Investments in associates
Associates are entities over which the Group has significant
influence but not control or joint control. Investments in
associates are accounted for in the consolidated balance sheet at
either fair value through profit or loss or by using the equity
method. On initial recognition, the Group elects to account for
investments in associates at either fair value through profit or loss
or by using the equity method based on assessment of the
expected strategy for the investment.
Under the equity accounted method, the Group’s share of the
associates’ post-acquisition net profit after income tax expense is
recognised in the consolidated statement of comprehensive
income. The cumulative post-acquisition movements in results
and reserves are adjusted against the carrying amount of the
investment. Distributions and dividends received from associates
are recognised in the consolidated financial report as a reduction
of the carrying amount of the investment.
Investments in associates at fair value through profit or loss are
initially recognised at fair value and transaction costs are
expensed in the consolidated statement of comprehensive
income.
(iii)
Joint arrangements
Under AASB 11 Joint Arrangements, investments in joint
arrangements are classified as either joint operations or joint
ventures. The classification depends on the contractual rights and
obligations of each investor, rather than the legal structure of the
joint arrangement.
The Group recognises its direct right to the assets, liabilities,
revenues and expenses of joint operations and its share of any
jointly held or incurred assets, liabilities, revenues and expenses.
These have been incorporated in the consolidated financial
statements.
Interests in joint ventures are accounted for using the equity
method, with investments initially recognised at cost and adjusted
thereafter to recognise the Group’s share of post-acquisition
profits or losses of the investee in profit or loss, and the Group’s
share of movements in other comprehensive income of the
investee in other comprehensive income. Dividends received or
receivable from joint ventures are recognised as a reduction in
the carrying amount of the investment.
When the Group’s share of losses in an equity accounted
investment equals or exceeds its interest in the entity, including
any other unsecured long-term receivables, the Group does not
recognise further losses, unless it has incurred obligations or
made payments on behalf of the other entity.
Unrealised gains on transactions between the Group and its
equity accounted investees are eliminated to the extent of the
Group’s interest in these entities. Unrealised losses are also
eliminated unless the transaction provides evidence of an
impairment of the asset transferred. Accounting policies of equity
accounted investees have been aligned where necessary to
ensure consistency with the policies adopted by the Group.
(iv)
Changes in ownership interests
When the Group ceases to equity account for an investment
because of a loss of joint control or significant influence, any
retained interest in the entity is remeasured to its fair value with
the change in carrying amount recognised in profit or loss. This
fair value becomes the initial carrying amount for the purposes of
subsequently accounting for the retained interest as a joint
venture entity or financial asset. In addition, any amounts
previously recognised in other comprehensive income in respect
of that entity are accounted for as if the Group had directly
disposed of the related assets or liabilities. This may mean that
amounts previously recognised in other comprehensive income
are reclassified to profit or loss. The Group treats transactions
with non-controlling interests that do not result in a loss of control
as transactions with equity owners of the Group.
If the ownership interest in a joint venture entity or an associate is
reduced but joint control or significant influence is retained, only a
proportionate share of the amounts previously recognised in other
comprehensive income is reclassified to profit or loss where
appropriate.
(d)
Foreign currency translation
(i)
Functional and presentation currencies
Items included in the financial statements of each of the Group’s
entities are measured using the currency of the primary economic
environment in which the entity operates (the functional
currency). The consolidated financial statements are presented in
Australian dollars, which is CHL’s and CHPT’s functional and
presentation currency.
(ii)
Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from
the settlement of such transactions and from the translation at
year end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in the
consolidated statement of comprehensive income, except when
they are deferred in equity as qualifying cash flow hedges and
qualifying net investment hedges or are attributable to part of the
net investment in a foreign operation.
Non-monetary items that are measured at fair value in a foreign
currency are translated using the exchange rates at the date
when the fair value was determined. Translation differences on
assets and liabilities carried at fair value are reported as part of
the fair value gain or loss.
(iii)
Foreign currency translation
On consolidation, exchange differences arising from the
translation of borrowings, and other financial instruments
designated as hedges of such investments, are recognised in
other comprehensive income.
(e)
Revenue recognition
The amount of revenue recognised in each period is based on the
delivery of performance obligations and when control has been
transferred to customers in accordance with the principles set out
in AASB 15. Where the Group enters into contracts with multiple
31 Summary of material accounting policies continued
service components, judgement is applied to determine whether
the components are:
‒
distinct – accounted for as separate performance
obligations;
‒
not distinct – combined with other promised services until a
distinct bundle is identified; or
‒
part of a series of distinct services that are substantially the
same and have the same pattern of transfer to the
customer.
For each performance obligation identified, it is determined
whether revenue is recognised at a point in time or over time.
Revenue is recognised over time if:
‒
the customer simultaneously receives and consumes the
benefits provided over the life of a contract as the services
are performed;
‒
the customer controls the asset that the Group is creating or
enhancing; or
‒
the Group’s performance does not create an asset with an
alternative use to the Group and has an enforceable right to
payment for performance completed to date.
At contract inception, the Group estimates the consideration to
which it expects to be entitled and has rights to receive under the
contract. Variable consideration, where the Group’s performance
could result in further revenue, is only included to the extent that it
is highly probable that a significant reversal of revenue
recognised will not occur.
In assessing the amount of consideration to recognise, key
judgements and assumptions are made on a forward-looking
basis where required.
Revenue excludes share of net profits of equity accounted
associates and joint ventures accounted for under the equity
method.
To the extent revenue has not been received at reporting date, a
receivable is recognised in the consolidated balance sheet.
Revenue from the Group’s funds management business is
categorised into the two main lines of operations, being
investment management and property services.
Revenue from the Group’s development investments forms part
of the development investment segment earnings.
Investment management revenue
Fund management fees are received for performance obligations
fulfilled over time with revenue recognised accordingly. Fund
management fees are determined in accordance with relevant
agreements for each fund, based on the fund’s periodic (usually
monthly or quarterly) Gross Asset Value (GAV).
Generally, invoicing of funds for management fees occurs on a
quarterly basis and are receivable within 21 days.
Performance fees are for performance obligations fulfilled over
time and for which consideration is variable. The fees for each
applicable fund are determined in accordance with the relevant
agreement which stipulates out-performance of a benchmark over
a given period.
Performance fee revenue is recognised to the extent that it is
highly probable that the amount of variable consideration
recognised will not be significantly reversed when the uncertainty
is resolved. Detailed calculations and an assessment of the risks
associated with the recognition of the fee are completed to inform
the assessment of the appropriate revenue to recognise.
Invoicing of funds for performance fees occurs in accordance with
the contractual performance fee payment date.
A contract asset is recognised in the consolidated balance sheet
at each reporting date in line with revenue recognised where the
right to receive consideration remains conditional on future
performance.
Transaction fee revenue is recognised at a point in time upon
fulfillment of the performance obligation. This is usually the point
at which control of the underlying asset being transacted has
transferred to the buyer.
Transaction fees are invoiced when the performance obligation
has been fulfilled and are receivable within 21 days.
Property services revenue
Property services primarily include property management,
development management, leasing, facilities and project
management. Revenue is recognised either over time or at a
point in time depending on the terms of the specific agreement for
each type of service. Invoicing of funds for property services fees
occurs on a monthly or quarterly basis and are receivable within
21 days.
Recovery of property and fund-related expenses revenue
Accounting, marketing, directors fee recoveries and property
management services provided to managed funds are charged as
an expense recovery. Revenue is recognised over time as the
performance obligations are fulfilled. Invoicing of funds for
expense recoveries occurs on a monthly or quarterly basis
depending on the recovery type and are receivable within 21
days.
Development revenue
Where Charter Hall has control of the underlying asset, revenue
from the sale of development assets is recognised when control
has been transferred to the customer. Where development assets
have been recognised in relation to the enhancement of an asset
controlled by the customer, revenue from the realisation of the
development costs are recognised over time in accordance with
the performance obligations of the contract.
Revenue is calculated by reference to the total consideration
expected to be received in exchange for fulfilling the performance
obligations under the contract. Any variable consideration is
constrained to the amount that is highly probable to not
significantly reverse. Revenue is recognised based on the most
appropriate method that depicts the transfer of goods and
services to the customer, generally the ‘cost to cost’ method.
A development asset is recognised in the consolidated balance
sheet at each reporting date in line with revenue recognised
where the right to receive consideration remains conditional on
future performance.
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31 Summary of material accounting policies continued
Proceeds from the sale of development assets are invoiced and
receivable in accordance with the relevant terms of the contract.
(f) Distributions/Dividends
Represents the distribution of income from investments
accounted for at fair value by the Group and Charter Hall
Property Trust Group.
(g)
Employee benefits
(i)
Wages and salaries and annual leave
Liabilities for wages and salaries, including non-monetary benefits
and annual leave expected to be settled within 12 months of the
reporting date, are recognised in other payables in respect of
employees’ services up to the reporting date and are measured at
the amounts expected to be paid when the liabilities are settled.
(ii)
Long service leave
Liabilities for other employee entitlements which are not expected
to be paid or settled within 12 months of reporting date are
accrued in respect of all employees at present values of future
amounts expected to be paid. Expected future payments are
discounted using a corporate bond rate with terms to maturity that
match, as closely as possible, the estimated future cash outflows.
(iii)
Retirement benefit obligations
Contributions to employee defined contribution superannuation
funds are recognised as an expense as they become payable.
(iv)
Bonus plans
Charter Hall recognises a liability and an expense for amounts
payable to employees. Charter Hall recognises a provision where
contractually obliged or where there is a past practice that has
created a constructive obligation.
(v)
Termination benefits
Termination benefits are payable when employment is terminated
by the Group before the normal retirement date, or when an
employee accepts voluntary redundancy in exchange for these
benefits. The Group recognises termination benefits at the earlier
of the following dates:
(a) when the Group can no longer withdraw the offer of those
benefits; and
(b) when the entity recognises costs for a restructuring that is
within the scope of AASB 137 and involves the payment of
termination benefits. In the case of an offer made to encourage
voluntary redundancy, the termination benefits are measured
based on the number of employees expected to accept the offer.
Benefits falling due more than 12 months after the end of the
reporting period are discounted to present value.
(h)
Development assets
Costs incurred in fulfilling a development contract with a customer
are recognised as a development asset.
Where Charter Hall has control of the asset, development costs
are recorded as inventory at the lower of cost and net realisable
value.
Where Charter Hall has incurred costs in relation to the
enhancement of an asset controlled by the customer, a
development contract asset is recognised in the consolidated
balance sheet where the right to receive consideration remains
conditional on future performance. Development assets are
recorded at the lower of cost or the total consideration expected
to be received less the total costs expected to be recognised as
an expense. Where consideration is received in excess of
revenue recognised, a development liability will be recognised.
Development assets are classified as non-current where the
group is not contractually entitled to payment within 12 months
from balance date.
(i)
Investment properties
Investment properties comprise investment interests in land and
buildings (including integral plant and equipment) held for the
purpose of producing rental income, including properties that are
under construction for future use as investment properties.
Initially, investment properties are measured at cost including
transaction costs. Subsequent to initial recognition, the
investment properties are stated at fair value. Fair value of
investment property is the price that would be received to sell an
asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. The best
evidence of fair value is given by current prices in an active
market for similar property in the same location and condition.
Gains and losses arising from changes in the fair values of
investment properties are included in the consolidated statement
of comprehensive income in the year in which they arise.
At each balance date, the fair values of the investment properties
are assessed by the respective Responsible Entity with reference
to independent valuation reports or through appropriate valuation
techniques adopted by the Responsible Entity. Further
information relating to valuation techniques can be found in Note
21(d).
Where the Group disposes of a property at fair value in an arm’s
length transaction, the carrying value immediately prior to the sale
is adjusted to the transaction price, and the adjustment is
recorded in the consolidated statement of comprehensive income
within net fair value gain/(loss) on investment property.
The carrying amount of investment properties recorded in the
consolidated balance sheet takes into consideration components
relating to lease incentives, leasing costs and fixed increases in
operating lease rentals in future years.
(j)
Plant and equipment
Plant and equipment is stated at historical cost less depreciation.
Historical cost includes expenditure that is directly attributable to
the acquisition of plant and equipment.
Subsequent costs are included in the asset’s carrying amount or
recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item
will flow to the Group and the cost of the item can be measured
reliably. All other repairs and maintenance are charged to the
consolidated statement of comprehensive income during the
financial year in which they are incurred.
Depreciation on other assets is calculated using the straight-line
method to allocate their cost or revalued amounts, net of their
residual values, over their estimated useful lives, as follows:
31 Summary of material accounting policies continued
‒
Furniture, fittings and equipment
3 to 10 years
‒
Fixtures
5 to 10 years
The assets’ residual values and useful lives are reviewed, and
adjusted if appropriate, at each reporting date.
An asset’s carrying amount is written down immediately to its
recoverable amount if the asset’s carrying amount is greater than
its estimated recoverable amount.
Gains and losses on disposals are determined by comparing
proceeds with carrying amount. These are included in the
consolidated statement of comprehensive income.
(k)
Assets and liabilities held for sale
Non-current assets or disposal groups are classified as held for
sale if it is highly probable that they will be recovered primarily
through sale rather than through continuing use. They are
measured at the lower of their carrying amount and fair value less
costs to sell, except for assets such as financial assets and
investment property that are carried at fair value.
Impairment losses on initial classification as held for sale and
subsequent gains and losses on remeasurement are recognised
in profit or loss. Once classified as held for sale, intangible assets
and property, plant and equipment are no longer amortised or
depreciated, and any equity-accounted investee is no longer
equity accounted.
(l)
Impairment of non-monetary assets
Assets are reviewed for impairment whenever events or changes
in circumstances indicate that the carrying amount may not be
recoverable.
An impairment loss is recognised for the amount by which the
asset’s carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of an asset’s fair value less
costs of disposal and value in use. For the purposes of assessing
impairment, assets are grouped at the lowest levels for which
there are separately identifiable cash inflows which are largely
independent of the cash inflows from other assets or groups of
assets (cash-generating units). Non-financial assets that suffered
impairment in prior years are reviewed for possible reversal of the
impairment at each reporting date.
(m) Business combinations
The acquisition method of accounting is used to account for all
business combinations, including business combinations
involving entities or businesses under common control,
regardless of whether equity instruments or other assets are
acquired. The consideration transferred for the acquisition of a
subsidiary comprises the fair values of the assets transferred, the
liabilities incurred and the equity interests issued. The
consideration transferred also includes the fair value of any
contingent consideration arrangement and the fair value of any
pre-existing equity interest in the subsidiary. Acquisition-related
costs are expensed as incurred. Identifiable assets acquired and
liabilities and contingent liabilities assumed in a business
combination are, with limited exceptions, measured initially at
their fair values at the acquisition date. On an acquisition-by-
acquisition basis, any non-controlling interest in the acquiree is
recognised either at fair value or at the non-controlling interests’
proportionate share of the acquiree’s net identifiable assets.
The excess of the consideration transferred, the amount of any
non-controlling interest in the acquiree and the acquisition-date
fair value of any previous equity interest in the acquiree over the
fair value of the acquirer’s share of the net identifiable assets
acquired is recorded as goodwill. If those amounts are less than
the fair value of the net identifiable assets of the subsidiary
acquired and the measurement of all amounts has been
reviewed, the difference is recognised directly in profit or loss as
a bargain purchase.
Where settlement of any part of cash consideration is deferred,
the amounts payable in the future are discounted to their present
value as at the date of exchange. The discount rate used is the
entity’s incremental borrowing rate, being the rate at which a
similar borrowing could be obtained from an independent
financier under comparable terms and conditions.
Contingent consideration is classified either as equity or a
financial liability. Amounts classified as a financial liability are
subsequently remeasured to fair value with changes in fair value
recognised in profit or loss.
(n)
Financial Instruments
(i)
Trade and other receivables
Trade and other receivables are recognised initially at fair value
and subsequently measured at amortised cost, less provision for
expected credit losses. Trade receivables are due for settlement
no more than 21 days from the date of recognition. Expected
credit losses in relation to trade receivables are reviewed on an
ongoing basis.
(ii)
Other financial assets
Classification
The Group classifies its other financial assets as being measured
either:
‒
at fair value through other comprehensive income or
through profit or loss; or
‒
at amortised cost.
All derivatives are classified based on their maturity date and are
not split based on notional cashflows.
Measurement
At initial recognition, the Group measures a financial asset at its
fair value plus, in the case of a financial asset not at fair value
through profit or loss, transaction costs that are directly
attributable to the acquisition of the financial asset. Transaction
costs of financial assets carried at fair value through profit or loss
are expensed in profit or loss.
Debt instruments
Subsequent measurement of debt instruments depends on the
Group’s business model for managing the asset and the cash
flow characteristics of the asset.
Assets that are held for collection of contractual cash flows where
those cash flows represent solely payments of principal and
interest are measured at amortised cost. A gain or loss on a debt
investment that is subsequently measured at amortised cost and
135
134 Charter Hall Group Annual Report 2024 / Directors’ Report and Financial Report / Notes to the Consolidated Financial Statements
Back to Contents
31 Summary of material accounting policies continued
is not part of a hedging relationship is recognised in profit or loss
when the asset is derecognised or impaired. Interest income from
these financial assets is included in finance income using the
effective interest rate method.
(iii)
Impairment
Trade receivables
For trade receivables, the Group applies the simplified approach
to providing for expected credit losses prescribed by AASB 9,
which requires the use of the lifetime expected credit loss
provision for all trade receivables from initial recognition of the
receivables.
Any impairment loss is recognised through the consolidated
statement of comprehensive income.
Debt instruments
The Group assesses on a forward-looking basis the expected
credit loss associated with its debt instruments carried at
amortised cost. The impairment methodology applied depends on
whether there has been a significant increase in credit risk.
(iv)
Derivatives and hedge accounting
The Group uses derivatives to hedge its exposure to interest
rates and foreign currency on borrowings. Derivative financial
instruments are measured and recognised at fair value on a
recurring basis.
The accounting for subsequent changes in fair value depends on
whether the derivative is designated as a hedging instrument, and
if so, the nature of the item being hedged. The Group designates
certain derivatives as either fair value hedges or cash flow
hedges.
The full fair value of a hedging derivative is classified as a non-
current asset or liability when the remaining maturity of the
hedged item is more than 12 months; it is classified as a current
asset or liability when the remaining maturity of the hedged item
is less than 12 months.
The Group’s derivatives in place as at 30 June 2024 qualified as
fair value and cash flow hedges under AASB 9. The Group’s risk
management strategies and hedge documentation are aligned
with the requirements of AASB 9 and these relationships are
therefore treated as continuing hedges.
Fair value hedges that qualify for hedge accounting
The gain or loss relating to interest payments on interest rate
swaps hedging fixed-rate borrowings is recognised in profit or
loss within finance costs. Changes in the fair value of derivative
hedging instruments and the hedged fixed-rate borrowings
attributable to interest rate risk are recognised within ‘Net
gains/(losses) from derivative financial instruments’. The gain or
loss relating to the ineffective portion is also recognised in profit
or loss within ‘Net gains/(losses) from derivative financial
instruments’.
Cash flow hedges that qualify for hedge accounting
The effective portion of changes in the fair value of derivatives is
recognised in other comprehensive income and accumulated in
the cash flow hedge reserve in equity. The gain or loss relating to
the ineffective portion is recognised immediately in profit or loss
within ‘Net gains/(losses) from derivative financial instruments’.
Amounts accumulated in equity are reclassified to profit or loss in
the periods when the hedged item affects profit or loss (for
instance when the forecast transaction that is hedged takes
place). The gain or loss relating to the effective portion of cross-
currency interest rate swaps hedging fixed-rate borrowings is
recognised in profit or loss within ‘Finance costs’.
Derivatives that do not qualify for hedge accounting
For derivative instruments that do not qualify for hedge
accounting, changes in the fair value of the derivative instrument
are recognised immediately in profit or loss.
(o)
Borrowings
Borrowings are initially recognised at fair value, net of transaction
costs incurred. Borrowings are subsequently measured at
amortised cost. Any difference between the proceeds (net of
transaction costs) and the redemption amount is recognised in
the consolidated statement of comprehensive income over the
period of the borrowing using the effective interest rate method.
Fees paid on the establishment of loan facilities are recognised
as transaction costs of the loan to the extent that it is probable
that some or all of the facility will be drawn down unless there is
an effective fair value hedge of the borrowings, in which case a
fair value adjustment will be applied based on the mark to market
movement in the benchmark component of the borrowings and
this movement is recognised in profit or loss. If the facility has not
been drawn down, the fee is capitalised as a prepayment and
amortised over the period of the facility to which it relates.
Borrowings are removed from the consolidated balance sheet
when the obligation specified in the contract is discharged,
cancelled or expired. The difference between the carrying amount
of a financial liability that has been extinguished or transferred to
another party and the consideration paid, including any non-cash
assets transferred or liabilities assumed, is recognised in profit or
loss as other income or finance costs.
Where the terms of a financial liability are renegotiated and the
entity issues equity instruments to a creditor to extinguish all or
part of the liability (debt for equity swap), a gain or loss is
recognised in profit or loss, which is measured as the difference
between the carrying amount of the financial liability and the fair
value of the equity instruments issued.
Borrowings are classified as current liabilities unless the Group
has an unconditional right to defer settlement of the liability for at
least 12 months after the reporting period.
Borrowing costs
Borrowing costs associated with the acquisition or construction of
a qualifying asset, including interest expense, are capitalised as
part of the cost of that asset during the period that is required to
complete and prepare the asset for its intended use. Borrowing
costs not associated with qualifying assets are expensed.
(p)
Provisions
Provisions are recognised when the Group has a present legal or
constructive obligation as a result of past events, it is probable
that an outflow of resources will be required to settle the
obligation, and the amount can be reliably estimated. Provisions
are not recognised for future operating losses.
31 Summary of material accounting policies continued
(q)
Comparative information
Where necessary, comparative information has been adjusted to
conform with changes in presentation in the current year.
(r)
Rounding of amounts
Under the option provided by ASIC Corporations (Rounding in
Financial/Directors’ Reports) Instrument 2016/191 issued by the
Australian Securities and Investments Commission relating to the
rounding off of amounts in the financial statements, amounts in
the Company and the Trust’s consolidated financial statements
have been rounded to the nearest hundred thousand in
accordance with that ASIC Corporations Instrument, unless
otherwise indicated.
137
136 Charter Hall Group Annual Report 2024 / Directors’ Report and Financial Report / Notes to the Consolidated Financial Statements
Back to Contents
Consolidated entity disclosure statement
For the year ended 30 June 2024
Name of entity
Type of entity
Trustee,
partner or
participant
in JV
% of share
capital
Place of
business/
country of
incorporation
Australian
resident or
foreign
resident
Foreign
jurisdiction(s)
or foreign
residents
Charter Hall Group
ALE Finance Company No.3 Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
Australian Leisure & Entertainment Property
Management Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
Bieson Pty Ltd
Body Corporate
Trustee 100%
Australia
Australia
Australia
Brisbane Square Holdings Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
Brisbane Square Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
CH Acacia Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
CH Banyan Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
CH Beech Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
CH Birch Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
CH Bottlebrush Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
CH Buttercup Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
CH Cacao Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
CH Cactus Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
CH Camellia Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
CH Carnation Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
CH Cedar Pty Ltd
Body Corporate
Trustee 100%
Australia
Australia
Australia
CH Coconut Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
CH Cork Pty Ltd
Body Corporate
Trustee 100%
Australia
Australia
Australia
CH Crestmead Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
CH Daffodil Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
CH Dandelion Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
CH Defence Holding Trust
Trust
n/a
100%
Australia
Australia
Australia
CH Defence Trust
Trust
n/a
100%
Australia
Australia
Australia
CH Fern Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
CH Fig Pty Ltd
Body Corporate
Trustee 100%
Australia
Australia
Australia
CH Genge Landowner Trust
Trust
n/a
100%
Australia
Australia
Australia
CH Geranium Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
CH Gum Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
CH Hibiscus Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
CH Honeysuckle Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
CH Hydrangea Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
CH Jacaranda Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
CH Jarrah Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
CH Jasmine Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
CH King William Trust
Trust
n/a
100%
Australia
Australia
Australia
CH Lavender Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
CH Lemon Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
CH Lilac Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
CH Lily Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
CH Maple Pty Ltd
Body Corporate
Trustee 100%
Australia
Australia
Australia
CH Marigold Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
CH Neem Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
CH Oak Pty Ltd
Body Corporate
Trustee 100%
Australia
Australia
Australia
CH Olive Pty Ltd
Body Corporate
Trustee 100%
Australia
Australia
Australia
CH Palm Pty Ltd
Body Corporate
Trustee 100%
Australia
Australia
Australia
CH Pine Pty Ltd
Body Corporate
Trustee 100%
Australia
Australia
Australia
CH Primrose Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
CH Rose Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
CH Teak Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
CH Wattle Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
CH Wembley Trust
Trust
n/a
100%
Australia
Australia
Australia
CH Willow Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
Charter Hall (NZ) Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
Charter Hall (Singapore) Funds Management Pte.
Ltd.
Body Corporate
n/a
100%
Singapore
Foreign
Singapore
Charter Hall Asset Services Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
Charter Hall CHAB Holding Trust
Trust
n/a
100%
Australia
Australia
Australia
Charter Hall Co-Investment Trust
Trust
n/a
100%
Australia
Australia
Australia
Charter Hall Co-Investment Trust 2
Trust
n/a
100%
Australia
Australia
Australia
Consolidated entity disclosure statement
For the year ended 30 June 2024
Name of entity
Type of entity
Trustee,
partner or
participant
in JV
% of share
capital
Place of
business/
country of
incorporation
Australian
resident or
foreign
resident
Foreign
jurisdiction(s)
or foreign
residents
Charter Hall Co-Investment Trust 3
Trust
n/a
100%
Australia
Australia
Australia
Charter Hall Co-Investment Trust 4
Trust
n/a
100%
Australia
Australia
Australia
Charter Hall Co-Investment Trust 6
Trust
n/a
100%
Australia
Australia
Australia
Charter Hall Co-Investment Trust 7
Trust
n/a
100%
Australia
Australia
Australia
Charter Hall Co-Investment Trust 8
Trust
n/a
100%
Australia
Australia
Australia
Charter Hall Co-Investment Trust 9
Trust
n/a
100%
Australia
Australia
Australia
Charter Hall Co-Investment Trust 10
Trust
n/a
100%
Australia
Australia
Australia
Charter Hall Co-Investment Trust 11
Trust
n/a
100%
Australia
Australia
Australia
Charter Hall Co-Investment Trust 12
Trust
n/a
100%
Australia
Australia
Australia
Charter Hall Co-Investment Trust 13
Trust
n/a
100%
Australia
Australia
Australia
Charter Hall Co-Investment Trust 14
Trust
n/a
100%
Australia
Australia
Australia
Charter Hall Co-Investment Trust 15
Trust
n/a
100%
Australia
Australia
Australia
Charter Hall Co-Investment Trust 16
Trust
n/a
100%
Australia
Australia
Australia
Charter Hall Co-Investment Trust 17
Trust
n/a
100%
Australia
Australia
Australia
Charter Hall Co-Investment Trust 18
Trust
n/a
100%
Australia
Australia
Australia
Charter Hall Co-Investment Trust 19
Trust
n/a
100%
Australia
Australia
Australia
Charter Hall Co-Investment Trust 20
Trust
n/a
100%
Australia
Australia
Australia
Charter Hall Debt Investment Partnership No. 1 Trust Trust
n/a
100%
Australia
Australia
Australia
Charter Hall Development Services Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
Charter Hall Direct Property Management Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
Charter Hall Direct Property Management Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
Charter Hall Escrow Agent Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
Charter Hall FLK Funds Management Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
Charter Hall Funds Management Ltd
Body Corporate
Trustee 100%
Australia
Australia
Australia
Charter Hall Holdings Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
Charter Hall Holdings Real Estate Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
Charter Hall Investment Management Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
Charter Hall Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
Charter Hall MFH Gordon Trust
Trust
n/a
100%
Australia
Australia
Australia
Charter Hall MFH Trust 1
Trust
n/a
100%
Australia
Australia
Australia
Charter Hall Nominees Pty Ltd
Body Corporate
Trustee 100%
Australia
Australia
Australia
Charter Hall Office Collins Street Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
Charter Hall Office Management Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
Charter Hall Opportunity Fund 4
Trust
n/a
100%
Australia
Australia
Australia
Charter Hall Opportunity Fund 5
Trust
n/a
100%
Australia
Australia
Australia
Charter Hall Opportunity Fund 6
Trust
n/a
100%
Australia
Australia
Australia
Charter Hall Property Securities Management Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
Charter Hall Property Trust
Trust
n/a
100%
Australia
Australia
Australia
Charter Hall Real Estate Management Services
(ACT) Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
Charter Hall Real Estate Management Services
(NSW) Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
Charter Hall Real Estate Management Services (QLD
& NT) Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
Charter Hall Real Estate Management Services (SA)
Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
Charter Hall Real Estate Management Services
(TAS) Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
Charter Hall Real Estate Management Services (VIC)
Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
Charter Hall Real Estate Management Services (WA)
Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
Charter Hall Retail Management Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
Charter Hall Social Infrastructure Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
Charter Hall Spring Trust
Trust
n/a
100%
Australia
Australia
Australia
Charter Hall Wale Ltd
Body Corporate
Trustee 100%
Australia
Australia
Australia
Charter Hall Wholesale Management Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
CHC CDC Holding Trust
Trust
n/a
100%
Australia
Australia
Australia
CHC Finance Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
CHH Investment Trust
Trust
n/a
100%
Australia
Australia
Australia
139
138 Charter Hall Group Annual Report 2024 / Directors’ Report and Financial Report / Notes to the Consolidated Financial Statements
Back to Contents
Consolidated entity disclosure statement
For the year ended 30 June 2024
Name of entity
Type of entity
Trustee,
partner or
participant
in JV
% of share
capital
Place of
business/
country of
incorporation
Australian
resident or
foreign
resident
Foreign
jurisdiction(s)
or foreign
residents
CHI Property Fund II (Formally: Irongate Property
Fund II)
Trust
n/a
100%
Australia
Australia
Australia
CHI Property No.1 Pty Ltd (Formally: Irongate
Property No. 1 Pty Ltd)
Body Corporate
n/a
100%
Australia
Australia
Australia
CHI Property No.2 Pty Ltd (Formally: Irongate
Property No. 2 Pty Ltd)
Body Corporate
n/a
100%
Australia
Australia
Australia
CHLWR No. 1 Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
CHLWR No. 2 Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
CHOF5 51 ARC Place Trust
Trust
n/a
100%
Australia
Australia
Australia
CHOF5 Arden Central Trust
Trust
n/a
100%
Australia
Australia
Australia
CHOF5 Bringelly Trust
Trust
n/a
100%
Australia
Australia
Australia
CHOF5 Canberra Trust
Trust
n/a
100%
Australia
Australia
Australia
CHOF5 Chalmers Crescent Trust
Trust
n/a
100%
Australia
Australia
Australia
CHOF5 Hassall Street Trust
Trust
n/a
100%
Australia
Australia
Australia
CHOF5 Horsley Drive Trust
Trust
n/a
100%
Australia
Australia
Australia
CHOF5 Little Bay P/L
Trust
n/a
100%
Australia
Australia
Australia
CHOF5 North Terrace Trust
Trust
n/a
100%
Australia
Australia
Australia
CHOF5 NQ Trust
Trust
n/a
100%
Australia
Australia
Australia
CHOF5 Pier Street Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
CHOF5 Richmond Trust
Trust
n/a
100%
Australia
Australia
Australia
CHOF5 Yatala Trust
Trust
n/a
100%
Australia
Australia
Australia
CHOF6 Bringelly Trust
Trust
n/a
100%
Australia
Australia
Australia
CHOF6 Darwin Trust
Trust
n/a
100%
Australia
Australia
Australia
CHOF6 EX 1 Trust
Trust
n/a
100%
Australia
Australia
Australia
CHOF6 EX 2 Trust
Trust
n/a
100%
Australia
Australia
Australia
CHOF6 EX 3 Trust
Trust
n/a
100%
Australia
Australia
Australia
CHOF6 EX SPV 1 Trust
Trust
n/a
100%
Australia
Australia
Australia
CHOF6 EX SPV 2 Trust
Trust
n/a
100%
Australia
Australia
Australia
CHOF6 EX SPV 3 Trust
Trust
n/a
100%
Australia
Australia
Australia
CHOF6 Excluded Holdings Trust
Trust
n/a
100%
Australia
Australia
Australia
CHOF6 Genge Street Trust
Trust
n/a
100%
Australia
Australia
Australia
CHOF6 Hume Trust
Trust
n/a
100%
Australia
Australia
Australia
CHOF6 JW Trust
Trust
n/a
100%
Australia
Australia
Australia
CHOF6 Smithfield Square Trust
Trust
n/a
100%
Australia
Australia
Australia
CHOF6 Symonston Trust
Trust
n/a
100%
Australia
Australia
Australia
CHOF6 Western Sydney Airport Trust
Trust
n/a
100%
Australia
Australia
Australia
CHPT Australian Convenience Retail Trust
Trust
n/a
100%
Australia
Australia
Australia
CHPT Dartmoor Trust
Trust
n/a
100%
Australia
Australia
Australia
CHPT EX 1 Trust
Trust
n/a
100%
Australia
Australia
Australia
CHPT EX 2 Trust
Trust
n/a
100%
Australia
Australia
Australia
CHPT EX 3 Trust
Trust
n/a
100%
Australia
Australia
Australia
CHPT EX SPV 2 Trust
Trust
n/a
100%
Australia
Australia
Australia
CHPT EX SPV 3 Trust
Trust
n/a
100%
Australia
Australia
Australia
CHPT Exchange Trust
Trust
n/a
100%
Australia
Australia
Australia
CHPT GP Trust
Trust
n/a
100%
Australia
Australia
Australia
CHPT Toorak Road Trust
Trust
n/a
100%
Australia
Australia
Australia
CHPT Wholesale Partnership Holding Trust
Trust
n/a
100%
Australia
Australia
Australia
CHPT Wholesale Partnership Investment Trust
Trust
n/a
100%
Australia
Australia
Australia
Corporate Square Wollongong Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
CPIF Hoppers Crossing Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
CPIF Myer Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
CPIF Oakleigh South Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
Dorcasia Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
Equity Real Estate Partners Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
FCN No.1 Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
Folkestone Gisborne Land Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
Folkestone Gisborne Land Trust
Trust
n/a
100%
Australia
Australia
Australia
Folkestone Hornsby Development Fund
Trust
n/a
100%
Australia
Australia
Australia
Folkestone Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
Folkestone No. 3 Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
Folkestone No. 5 Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
Consolidated entity disclosure statement
For the year ended 30 June 2024
Name of entity
Type of entity
Trustee,
partner or
participant
in JV
% of share
capital
Place of
business/
country of
incorporation
Australian
resident or
foreign
resident
Foreign
jurisdiction(s)
or foreign
residents
Folkestone No. 7 Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
Folkestone No. 8 Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
Folkestone Real Estate Services Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
Folkestone Seniors Living Management Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
Folkestone SI 1 Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
Folkestone SI 2 Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
Folkestone South Dural Development Fund
Trust
n/a
100%
Australia
Australia
Australia
Hadfield Walter Street Partnership
Partnership
n/a
100%
Australia
Australia
Australia
Larapinta Nominees Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
Millers Road Altona Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
N1MP (T NO.2) PTY LTD
Body Corporate
n/a
100%
Australia
Australia
Australia
N1MP (T NO.3) PTY LTD
Body Corporate
n/a
100%
Australia
Australia
Australia
Southern Cross West Investment TC Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
CHOF5 Westmead Trust
Trust
n/a
100%
Australia
Australia
Australia
Visokoi Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
Votraint No. 1622 Pty Ltd
Body Corporate
n/a
100%
Australia
Australia
Australia
141
140 Charter Hall Group Annual Report 2024 / Directors’ Report and Financial Report / Notes to the Consolidated Financial Statements
Back to Contents
In the opinion of the Directors of Charter Hall Limited (Company), and the Directors of the Responsible Entity of Charter Hall Property
Trust (Trust), Charter Hall Funds Management Limited (collectively referred to as the Directors):
(a)
the financial statements and notes of Charter Hall Limited and its controlled entities including Charter Hall Property Trust and
its controlled entities (Charter Hall Group) and Charter Hall Property Trust and its controlled entities (Charter Hall Property
Trust Group) set out on pages 83 to 137 are in accordance with the Corporations Act 2001, including:
(i)
complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting
requirements; and
(ii)
giving a true and fair view of Charter Hall Group’s and Charter Hall Property Trust Group’s financial positions as at 30
June 2024 and of their performance for the financial year ended on that date; and
(b)
there are reasonable grounds to believe that both Charter Hall Limited and the Charter Hall Property Trust will be able to
pay their debts as and when they become due and payable; and
(c)
at the date of this declaration, there are reasonable grounds to believe that the members of the extended closed group
identified in Note 29 will be able to meet any obligations or liabilities to which they are, or may become, subject by virtue of the
deed of cross guarantee described in Note 29; and
(d)
the consolidated entity disclosure statement on pages 138 to 141 is true and correct.
Note 31(b) confirms that the financial statements also comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board.
The Directors have been given the declarations by the Managing Director and Group CEO and Chief Financial Officer required by
section 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the Directors.
David Clarke
Chair
Sydney
21 August 2024
Directors' Declaration to Securityholders
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142 Charter Hall Group Annual Report 2024 / Directors’ Report and Financial Report / Directors' Declaration to Securityholders
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We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Independence
We are independent of Charter Hall Group and Charter Hall Property Trust Group in accordance with
the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of
the Accounting Professional & Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
the Code.
Our audit approach
An audit is designed to provide reasonable assurance about whether the financial reports are free
from material misstatement. Misstatements may arise due to fraud or error. They are considered
material if individually or in aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of the financial reports.
We tailored the scope of our audit to ensure that we performed enough work to be able to give an
opinion on the financial reports as a whole, taking into account the geographic and management
structure of Charter Hall Group and Charter Hall Property Trust Group, their accounting processes and
controls and the industry in which they operate.
Audit scope
Key audit matters
•
Our audit focused on areas where Charter Hall
Group and Charter Hall Property Trust Group
made subjective judgements; for example,
significant accounting estimates involving
assumptions and inherently uncertain future
events.
•
We, as the group engagement team, identified
separate components of Charter Hall Group and
Charter Hall Property Trust Group. Component
audit teams assisted the group engagement team
in performing procedures over certain
components.
•
At both the Charter Hall Group and Charter Hall
Property Trust Group levels, audit procedures
were performed over group transactions and
financial report disclosures.
•
The work performed by component audit teams,
together with the additional audit procedures
performed at the Charter Hall Group and Charter
Hall Property Trust Group levels, provided us with
sufficient evidence for our opinion on the financial
reports as a whole.
•
Amongst other relevant topics, we communicated
the following key audit matter to the Audit, Risk
and Compliance Committee:
−
Carrying value of investments accounted for
using the equity method (Charter Hall Group
and Charter Hall Property Trust Group)
•
This is further described in the Key audit matters
section of our report.
PricewaterhouseCoopers, ABN 52 780 433 757
One International Towers Sydney, Watermans Quay, Barangaroo, GPO BOX 2650, SYDNEY NSW 2001
T: +61 2 8266 0000, F: +61 2 8266 9999
Level 11, 1PSQ, 169 Macquarie Street, Parramatta NSW 2150, PO Box 1155 Parramatta NSW 2124
T: +61 2 9659 2476, F: +61 2 8266 9999
Liability limited by a scheme approved under Professional Standards Legislation.
Independent auditor’s report
To the stapled securityholders of Charter Hall Group and the unitholders of Charter Hall Property Trust
Report on the audit of the financial reports
Our opinion
In our opinion:
The accompanying financial reports of Charter Hall Limited and its controlled entities, and Charter Hall
Property Trust and its controlled entities (together referred to as “Charter Hall Group”) and Charter Hall
Property Trust and its controlled entities (together referred to as “Charter Hall Property Trust Group”)
are in accordance with the Corporations Act 2001, including:
1.
giving a true and fair view of the Charter Hall Group's and the Charter Hall Property Trust
Group’s financial positions as at 30 June 2024 and of their financial performance for the year
then ended
2.
complying with Australian Accounting Standards and the Corporations Regulations 2001.
What we have audited
The Charter Hall Group and Charter Hall Property Trust Group financial reports comprise:
•
the consolidated balance sheets as at 30 June 2024
•
the consolidated statements of comprehensive income for the year then ended
•
the consolidated statement of changes in equity – Charter Hall Group for the year then ended
•
the consolidated statement of changes in equity – Charter Hall Property Trust Group for the year
then ended
•
the consolidated cash flow statements for the year then ended
•
the notes to the consolidated financial statements, including material accounting policy information
and other explanatory information
•
the consolidated entity disclosure statement as at 30 June 2024
•
the Directors’ declaration to securityholders.
The Charter Hall Group comprises Charter Hall Limited and the entities it controlled at year end or
from time to time during the financial year and includes Charter Hall Property Trust and the entities it
controlled at year end or from time to time during the financial year. The Charter Hall Property Trust
Group comprises Charter Hall Property Trust and the entities it controlled at year end or from time to
time during the financial year.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
reports section of our report.
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Key audit matter
How our audit addressed the key audit matter
this to be a key audit matter.
•
Assessing the reasonableness of the relevant
disclosures in the financial reports in light of
the requirements of Australian Accounting
Standards.
Other information
The directors of Charter Hall Limited and the directors of Charter Hall Funds Management Limited, the
responsible entity of Charter Hall Property Trust, (collectively referred to as “the Directors”) are
responsible for the other information. The other information comprises the information included in the
annual report for the year ended 30 June 2024, but does not include the financial reports and our
auditor’s report thereon.
Our opinion on the financial reports does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon through our opinion on the financial reports. We
have issued a separate opinion on the remuneration report.
In connection with our audit of the financial reports, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
reports or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of
this auditor’s report, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the financial reports
The Directors are responsible for the preparation of the financial reports in accordance with Australian
Accounting Standards and the Corporations Act 2001, including giving a true and fair view, and for
such internal control as the Directors determine is necessary to enable the preparation of the financial
reports that are free from material misstatement, whether due to fraud or error.
In preparing the financial reports, the Directors are responsible for assessing the ability of Charter Hall
Group and Charter Hall Property Trust Group to continue as going concerns, disclosing, as applicable,
matters related to going concern and using the going concern basis of accounting unless the Directors
either intend to liquidate Charter Hall Group and Charter Hall Property Trust Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial reports
Our objectives are to obtain reasonable assurance about whether the financial reports as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial reports for the current period. The key audit matter was addressed in the
context of our audit of the financial reports as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on this matter. Further, any commentary on the outcomes of a
particular audit procedure is made in that context.
Key audit matter
How our audit addressed the key audit matter
Carrying value of investments accounted for using
the equity method (Charter Hall Group and Charter
Hall Property Trust Group)
(Refer to Notes 2 & 3)
Charter Hall Group and Charter Hall Property Trust
Group invest in both funds management and property
investment entities, including certain underlying funds
managed by Charter Hall Group. These funds comprise
listed and unlisted funds which invest across a range of
office, industrial, retail, social infrastructure and
diversified property portfolios.
These investments are typically classified as
associates or joint ventures, as the investor is
considered to have significant influence or joint control.
Investments in associates and joint ventures contribute
a significant proportion of total expenses and total
assets.
In accordance with Australian Accounting Standards,
interests in associates and joint ventures need to be
assessed for indicators of impairment at the reporting
date. If indicators of impairment exist, the recoverable
amount for each investment needs to be estimated.
These assessments involve significant judgements in
estimating future cash flows and the rate at which they
are discounted.
Given the financial significance of these investments to
the results and consolidated balance sheets of Charter
Hall Group and Charter Hall Property Trust Group,
together with the extent of judgement involved in light
of the continued impact and uncertainty of the current
economic environment in which Charter Hall Group and
Charter Hall Property Trust Group operate, we consider
Our audit procedures included evaluating the design of
relevant controls relating to Charter Hall Group’s and
Charter Hall Property Trust Group’s equity accounted
investments process.
To assess the carrying amount of investments
accounted for using the equity method, our audit
included the following audit procedures, amongst
others:
•
Updating our understanding of market
conditions relating to the investments and
discussing with management the particular
circumstances affecting the investments.
•
On a sample basis, reperforming the equity
method of accounting calculations by
reference to underlying investee financial
information.
•
For a sample of material acquisitions made
during the year, agreeing certain transaction
details to source documents.
•
Evaluating the assessments made by Charter
Hall Group and Charter Hall Property Trust
Group of whether there were any indicators of
impairment against the requirements of
Australian Accounting Standards.
•
For investments where indicators of
impairment were identified, our procedures
included:
o
evaluating the appropriateness of the
impairment assessment methodology
and significant assumptions applied
in calculating the recoverable
amounts of the relevant investments.
o
performing testing over the
mathematical accuracy of certain
underlying calculations.
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146 Charter Hall Group Annual Report 2024 / Directors’ Report and Financial Report / Independent Auditor's Report
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if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of the financial reports.
A further description of our responsibilities for the audit of the financial reports is located at the
Auditing and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our
auditor's report.
Report on the remuneration report
Our opinion on the remuneration report
We have audited the remuneration report included in the directors’ report for the year ended 30 June
2024.
In our opinion, the remuneration report of Charter Hall Limited for the year ended 30 June 2024
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of Charter Hall Limited are responsible for the preparation and presentation of the
remuneration report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the remuneration report, based on our audit conducted in accordance with
Australian Auditing Standards.
PricewaterhouseCoopers
R W McMahon
Sydney
Partner
21 August 2024
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148 Charter Hall Group Annual Report 2024 / Directors’ Report and Financial Report / Independent Auditor's Report
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Securityholder analysis
Holding distribution
as at 29 July 2024
Range
Stapled
securities held
% of issued
stapled securities
No. of
holders
100,001 and Over
441,128,817
93.26
53
50,001 to 100,000
2,088,236
0.44
28
10,001 to 50,000
8,610,177
1.82
457
5,001 to 10,000
6,325,622
1.34
887
1,001 to 5,000
11,759,024
2.49
4,967
1 to 1,000
3,085,323
0.65
8,249
Total
472,997,199
100.00
14,641
Unmarketable Parcels
0
0.00
0
Substantial securityholder notices
as at 29 July 2024
Ordinary securities
Date of change
Stapled
securities held
% stapled
securities held
State Street Corporation
10 June 2024
28,724,330
6.07
UniSuper Limited
31 May 2024
23,743,459
5.02
Blackrock Group
20 February 2024
23,798,859
5.03
Mitsubishi UFJ Financial Group, Inc.
3 November 2023
30,584,655
6.47
First Sentier Investors Holdings Pty Limited
3 November 2023
30,584,655
6.47
Commonwealth Bank of Australia
30 June 2022
28,311,207
5.99
KKR Entities
29 June 2022
28,140,643
5.95
Superannuation and In-vestments HoldCo Pty Ltd
29 June 2022
28,140,653
5.95
Top 20 securityholders
as at 29 July 2024
Rank Name
A/C designation
Stapled
securities held
%IC
1
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
166,263,083
35.15
2
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
118,586,023
25.07
3
CITICORP NOMINEES PTY LIMITED
63,660,440
13.46
4
BNP PARIBAS NOMINEES PTY LTD
32,151,842
6.80
5
CITICORP NOMINEES PTY LIMITED
13,723,944
2.90
6
NATIONAL NOMINEES LIMITED
12,524,066
2.65
7
BNP PARIBAS NOMS PTY LTD
12,180,519
2.58
8
HSBC CUSTODY NOMINEES
(AUSTRALIA) LIMITED
3,489,302
0.74
9
BNP PARIBAS NOMINEES PTY LTD
2,266,738
0.48
10
BNP PARIBAS NOMINEES PTY LTD
1,802,750
0.38
11
MR ANGUS DAVID ST JOHN PARADICE
1,288,586
0.27
12
HSBC CUSTODY NOMINEES
(AUSTRALIA) LIMITED
1,156,976
0.24
13
BNP PARIBAS NOMS (NZ) LTD
1,090,308
0.23
14
PORTMIST PTY LIMITED
841,773
0.18
15
NETWEALTH INVESTMENTS LIMITED
662,430
0.14
16
TROY CHRISTOPHER ANGUS
566,357
0.12
17
JOHN CHRISTOPHER LAKE
555,704
0.12
17
MR MATHEW JAMES RIORDAN
555,704
0.12
18
ONE MANAGED INVESTMENT FUNDS LTD
527,542
0.11
19
BNP PARIBAS NOMINEES PTY LTD
486,723
0.10
20
HSBC CUSTODY NOMINEES
(AUSTRALIA) LIMITED-GSCO ECA
469,959
0.10
Total
434,850,769
91.94
Balance of register
38,146,430
8.06
Grand total
472,997,199
100.00
150 Charter Hall Group Annual Report 2024 / Securityholder analysis
151
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Investor information
How do I invest in Charter Hall?
Charter Hall Group securities are listed on the
Australian Securities Exchange (ASX: CHC).
Securityholders will need to use the services of a
stockbroker or an online broking facility to invest
in Charter Hall.
Where can I find more information
about Charter Hall?
Charter Hall’s website, charterhall.com.au
contains extensive information on our Board
and management team, corporate governance,
sustainability, our property portfolio and all investor
communications including distribution and tax
information, reports and presentations. The website
also provides information on the Group’s other
managed funds available for investment.
Can I receive my Annual Report
electronically?
Charter Hall provides its annual report as a PDF,
accessible on its website. You can elect to receive
notification that this report is available online via your
Investor Centre login.
How do I receive payment of my distribution?
Charter Hall pays its distribution via direct credit. This
enables you to receive automatic payment of your
distributions quickly and securely. You can nominate
any Australian or New Zealand bank, building society,
credit union or cash management account for direct
payment by downloading a direct credit form using
the Investor Login facility and sending it to MUFG
Pension & Market Services (formerly Link Market
Services Limited). On the day of payment, you will be
sent a statement via post or email confirming that the
payment has been made and setting out details of
the payment. The Group no longer pays distributions
by cheque.
Can I reinvest my distribution?
The Distribution Reinvestment Plan (DRP) allows you
to have your distributions reinvested in additional
securities in Charter Hall Group without the need to
pay brokerage, rather than having your distributions
paid to you.
The DRP is currently inactive. If you have previously
elected to participate in the DRP, your election will be
automatically reinstated if the DRP is reactivated. If
you have not elected to participate in the DRP or you
would like to vary your participation, you can change
your election online using the Investor Login facility, or
you need to complete a DRP Application or Variation
Form available from the Registry.
Do I need to supply my
Tax File Number?
You are not required by law to provide your tax file
number (TFN) or exemption. However, if you do not
provide your TFN or exemption, withholding tax at
the highest marginal rate may be deducted from
your distributions. If you have not provided your TFN
or exemption and wish to do so, please contact
the Registry, your broker, or use Investor Login to
download the TFN form.
How do I complete my annual tax return for
the distributions I receive from Charter Hall?
At the end of each financial year, the Group issue
securityholders with an Annual Taxation Statement.
This statement includes information required to
complete your tax return. The distributions paid in
February and August are required to be included in
your tax return for the financial year the income
was earned, that is, the distribution income paid in
August 2024 should be included in your 2024
financial year tax return.
How do I make a complaint?
Any securityholder wishing to lodge a complaint
should refer to our Complaints Guide for relevant
contact details. charterhall.com.au/complaints
Contact details
Registry
To access information on your holding or update
your details including name, address, tax file
number, payment instructions and document
requests, contact:
MUFG Pension & Market Services
(formerly Link Market Services Limited)
Locked Bag A14
Sydney South NSW 1235
Phone +61 1300 303 063
Email charterhall.reits@linkmarketservices.com.au
Web
linkmarketservices.com.au
Investor Relations
All other enquiries related to Charter Hall Group
can be directed to Investor Relations:
Charter Hall Group
GPO Box 2704
Sydney NSW 2001
Phone +61 1300 365 585
Email
reits@charterhall.com.au
Web
charterhall.com.au
152 Charter Hall Group Annual Report 2024 / Investor information
153
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275 George Street, Brisbane Qld
Turrbal and Yuggera land
Corporate directory
Registered Office
Level 20, No.1 Martin Place
Sydney NSW 2000
Phone +61 2 8651 9000
ASX code CHC
Directors
David Clarke (Chair), Jacqueline
Chow FAICD, Stephen Conry AM,
David Harrison, Karen Moses,
Greg Paramor AO and David Ross.
Company Secretary
Mark Bryant
Auditor
PricewaterhouseCoopers
One International Towers Sydney
Watermans Quay, Barangaroo
Sydney NSW 2000
Important information: This Annual Report has been prepared and issued by Charter Hall Limited
(ABN 57 113 531 150) and Charter Hall Funds Management Limited (ABN 31 082 991 786; AFSL 262861)
(CHFML) as Responsible Entity of the Charter Hall Property Trust (together, the Charter Hall Group
or the Group). The information contained in this report has been compiled to comply with legal
and regulatory requirements and to assist the recipient in assessing the performance of the Group
independently and does not relate to, and is not relevant for, any other purpose. This report is not
intended to be and does not constitute an offer or a recommendation to acquire any securities in the
Charter Hall Group. This report does not take into account the personal objectives, financial situation
or needs of any investor. Before investing in Charter Hall Group securities, you should consider your
own objectives, financial situation and needs and seek independent financial, legal and/or taxation
advice. Historical performance is not a reliable indicator of future performance. Due care and attention
has been exercised in the preparation of forward-looking statements. However, any forward-looking
statements contained in this report are not guarantees or predictions of future performance and, by
their very nature, are subject to uncertainties and contingencies, many of which are outside the control
of the Group. Actual results may vary materially from any forward-looking statements contained in this
report. Readers are cautioned not to place undue reliance on any forward-looking statements. Except
as required by applicable law, the Group does not undertake any obligation to publicly update or review
any forward-looking statements, whether as a result of new information or future events. The receipt
of this report by any person and any information contained herein or subsequently communicated
to any person in connection with the Charter Hall Group is not to be taken as constituting the giving
of investment, legal or tax advice by the Charter Hall Group nor any of its related bodies corporate,
directors or employees to any such person. Neither the Charter Hall Group, its related bodies corporate,
directors, employees nor any other person who may be taken to have been involved in the preparation
of this report represents or warrants that the information contained in this report, provided either
orally or in writing to a recipient in the course of its evaluation of the Charter Hall Group or the matters
contained in this report, is accurate or complete. CHFML does not receive fees in respect of the
general financial product advice it may provide; however, entities within the Charter Hall Group receive
fees for operating the Charter Hall Property Trust in accordance with its constitution. Entities within
the Group may also receive fees for managing the assets of, and providing resources to, the Charter
Hall Property Trust. All information herein is current as at 30 June 2024 unless otherwise stated. All
references to dollars ($) or A$ are to Australian Dollars unless otherwise stated. Information regarding
US Investors/US Persons: Each person that holds Charter Hall Group securities that is in the United
States (US) or is a US Person is required to be a Qualified Institutional Buyer/Qualified Purchaser (QIB/
QP) at the time of the acquisition of any Charter Hall Group securities, and is required to make the
representations in the confirmation letter or subscription agreement as of the time it acquired the
applicable securities. The securities can only be resold or transferred in a regular brokered transaction
on the ASX in accordance with Rule 903 or 904 of Regulation S, where neither it nor any person acting
on its behalf knows, or has reason to know, that the sale has been prearranged with a US Person, or
that the purchaser is in the United States or a US Person (e.g. no prearranged trades (‘special crossing’)
with US Persons or other off-market transactions). To the maximum extent permitted by law, the Charter
Hall Group reserves the right to: (i) request any person that they deem to be in the United States or a
US Person, who was not at the time of acquisition of the securities a QIB/QP, to sell its securities; (ii)
refuse to record any subsequent sale or transfer of securities to a person in the United States or a US
Person; and (iii) take such other action as it deems necessary or appropriate to enable the Charter Hall
Group to maintain the exception from registration under section 3(c) (7) of the Investment Company Act
1940 (US). If you are not the beneficial owner of securities in the Charter Hall Group, you must pass this
information to the beneficial owner of the securities. © Charter Hall
154 Charter Hall Group Annual Report 2024 / Corporate directory
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