Charter Hall has upgraded FY19 operating earnings growth guidance to 24% from 14-17%. The broker had assumed 16%. The upgrade largely reflects an upgrade to the Charter Hall Office Trust performance fee. Upside to this fee, and to assets under management, suggest upside risks to FY20 guidance, the broker believes.
Charter Hall has announced a reduction in its distribution pay-out policy to 70-95% of operating earnings per share from 85-95%. At the lower end, Macquarie calculates this implies a -10% decline versus FY18.
Charter Hall will create a new wholesale shopping centre fund, the Charter Hall Prime Retail Fund, and has also acquired 50% of Coles’ head office in Melbourne. The first acquisition for the CPRF will be Campbelltown Mall in Sydney.
First half operating earnings were stronger than UBS expected. Growth was driven by the capital deployed into property investments while assets under management grew which drove funds management fees and strong performance fees.