Charter Hall Group Bought A 24 Storey Building For $140 Million

Charter Hall Group (ASX:CHC) has bought a 24 storey building for $140 million from Singapore billionaire Koh Wee Meng. The building was initially purchased by Koh Wee Meng's Frangrance Group in the year 2014 for $78 million and it is major corner office tower in Melbourne and it is next to another CPOF (Charter Hall's Prime Office Fund) owned a building at 55 King Street opposite the Grollo-owned Rialto Tower. This purchase will provide Charter Hall a huge 4,620 square metre potential development site in the heart of Melbourne's CBD. Despite the release of this news, the share price of Charter Hall Group decreased by 0.145 percent as on 29 October 2018.

Recently, it was announced that Charter Hall Group will acquire 100 percent of the ordinary shares in Folkestone Limited. Folkestone’s largest fund is the ASX-listed Folkestone Education Trust (FET), which is the largest landlord within the early learning sector, owning and managing a $1 billion portfolio of 410 childcare properties across Australia and New Zealand. The acquisition of Folkestone limited will increase the Charter Hall’s investable universe into the social infrastructure and early learning sector. Further, the acquisition will result in Charter Hall becoming the largest shareholder in FET with a 12% stake, delivering Charter Hall an attractive 6.3% passing yield from a $1 billion 9.9-year WALE portfolio of properties.Â

In FY 2018, the company’s Funds Under Management (FUM) increased by 17 percent to $23.2 billion and the Property Investments grew by 11.7% which has delivered total property investment return of 12.3 percent. In FY 2018, the statutory profit after tax attributable to stapled securityholders for the year was $250.2 million compared to a profit of $257.6 million for the year ended 30 June 2017. The Operating earnings were $175.8 million in FY 2018 compared to $151.2 million for the year ended 30 June 2017, which is an increase of 16.3 percent. The operating earnings per stapled security (OEPS) has increased by 5.0% from 35.9 cents in FY 2017 to 37.7 cents in FY 2018. The annual distribution per stapled security (DPS) increased by 6.0 percent from 30.0 cents for the year ended 30 June 2017 to 31.8 cents for the year ended 30 June 2018. The Net Tangible Assets per stapled security increased by 6.1% from $3.60 in FY 2017 to $3.82 in FY 2018.

The Funds Under Management (FUM) of the company increased from $19.8 billion in FY 2017 to $23.2 billion in FY 2018. The increase in the FUM was mainly due to the establishment of a new fund, Charter Hall Direct Diversified Consumer Staples Fund, significant valuation uplifts, property acquisitions and developments in Charter Hall Office Trust, Charter Hall Prime Office Fund, Charter Hall Prime Industrial Fund, Core Logistics Partnership Trust and Charter Hall Counter Cyclical Trust.

In the past six months, the share price of the company increased by 19.44 percent as on 26 October 2018 and traded at a PE level of 12.810x. CHC’s shares traded at $6.870 with a market capitalization of circa $3.2 billion as on 29 October 2018 (AEST 4:00 PM).

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