Company Reports

Charter Hall's fiscal 2026 operating earnings soared 27% to AUD 488 million, and the group expects another 11% uplift next year. Yet, investors appear unsatisfied with guidance. Shares fell 6%.

Charter Hall manages retail and institutionally listed and unlisted property investments. Management base fees and property services fees are relatively stable. The group also co-invests in many of its vehicles to align interest with funds management clients. But we expect less co-investments in the future as parking money in its own funds ties up capital.

Charter Hall manages retail and institutionally listed and unlisted property investments. Management base fees and property services fees are relatively stable. The group also co-invests in many of its vehicles to align interest with funds management clients. But we expect less co-investments in the future as parking money in its own funds ties up capital.

Charter Hall upgrades fiscal 2026 guidance for a third time in just over six months. Management now expects operating earnings of AUD 103 cents per security, up from AUD 100 cents previously, representing 27% growth from last year. Securities jumped 7%.

Charter Hall upgraded fiscal 2026 guidance for the second time in three months. Management lifted expected operating earnings by 5% to AUD 1 per security, guiding to 23% growth over fiscal 2025.

Charter Hall manages retail and institutionally listed and unlisted property investments. Management base fees and property services fees are relatively stable. The group also co-invests in many of its vehicles to align interest with funds management clients. But we expect less co-investments in the future as parking money in its own funds ties up capital.

Charter Hall Group lifted fiscal 2026 operating earnings guidance by 6% to AUD 95.0 cents per security. This represents a 17% increase from last year. Security prices jumped more than 5% immediately after the announcement.

Charter Hall manages retail and institutionally listed and unlisted property investments. Management base fees and property services fees are relatively stable. The group also co-invests in many of its vehicles to align interest with funds management clients. But we expect less co-investments in the future as parking money in its own funds ties up capital. We forecast a declining contribution from co-investments to one third of the group's EBITDA, compared with the historical average of 40%.

Charter Hall manages retail and institutionally listed and unlisted property investments. Management base fees and property services fees are relatively stable. The group also co-invests in many of its vehicles to align interest with funds management clients. But we expect less co-investments in the future as parking money in its own funds ties up capital. We forecast a declining contribution from co-investments to one third of the group's EBITDA, compared with the historical average of 40%.

Charter Hall Group delivered operating earnings of AUD 81.4 cents per security, a 7% increase from fiscal 2024. Distributions were AUD 47.8 cents per security, on an eight-year streak of 6% growth.

The real estate sector is not immune to the potential economic impact of US tariffs. There is growing uncertainty as the likelihood of slower Australian gross domestic product growth mounts.

Charter Hall manages retail and institutionally listed and unlisted property investments. Management base fees and property services fees are relatively stable. The group also co-invests in many of its vehicles to align interest with funds management clients. But we expect less co-investments in the future as parking money in its own funds ties up capital. We forecast a declining contribution from co-investments to one third of the group's EBITDA, compared with the historical average of 40%.

We transfer coverage of Charter Hall and raise our fair value estimate 2% to AUD 17.50 per security. This increase is driven by slightly more optimistic growth assumptions on funds under management for the asset management business. We assume a five-year compound annual growth rate of 6% on FUM growth. While this is below the fiscal 2020-24 average of 18%, it is a tad higher than our growth assumptions for many other property fund managers, driven by Charter Hall’s track record and scale.

Charter Hall reported half-year earnings slightly better than we forecast, with operating earnings per share of AUD 41.5 cents per security. The main surprise is the resumption of growth in funds under management. We lift our fiscal 2025 operating EPS forecast by 3% to AUD 81 cents per security, in line with the upgraded guidance. This represents 7% growth on last year’s operating earnings, compared with our prior expectation of 4%. Our estimated distributions remain AUD 47.8 cents per security, up 6% from last year on a 59% payout ratio.

Charter Hall Group manages retail and institutional listed and unlisted property investments. It typically co-invests, aligning itself with its funds management clients. This gives Charter Hall diversified property exposure, so rental income produced accounts for about half of the group’s EBITDA. A smaller portion of EBITDA comes from development, including development fees for managing projects for clients, and development profits on its own stake in each project.

More jobs have been added to office-using sectors. According to the Australian Bureau of Statistics, Australian white-collar job numbers rose 4% in the 12 months to Aug. 31. This is the strongest growth since May 2022. Compared with November 2019, there are 13% more office workers in Australia. The gains were largely contributed by hiring and real estate services, public administration and safety, and education and training sectors.

Narrow-moat Charter Hall Group delivered a fiscal 2024 result in line with our forecasts and management guidance. Operating earnings per security of AUD 75.8 cents fell 19% from a year ago while distributions of AUD 45.1 cents per security rose 6%. For fiscal 2025, management expects another 6% increase in distributions, slightly above our prior forecast of 4%. Management also guides to OEPS of AUD 79 cents which, if achieved, would be the first time OEPS expands since fiscal 2022. The management forecast is based on stabilization of asset values evidenced by recent transactions and unpinned by a quality portfolio.

Charter Hall Group manages retail and institutional listed and unlisted property investments. It typically co-invests, aligning itself with its funds management clients. This gives Charter Hall diversified property exposure, so rental income produced accounts for about half of the group’s EBITDA. A smaller portion of EBITDA comes from development, including development fees for managing projects for clients, and development profits on its own stake in each project.

Charter Hall Group manages retail and institutional listed and unlisted property investments. It typically co-invests, aligning itself with its funds management clients. This gives Charter Hall diversified property exposure, so rental income produced accounts for about a fifth of the group’s EBITDA. A smaller portion of EBITDA comes from development, including development fees for managing projects for clients, and development profits on its own stake in each project.

We keep our AUD 16.25 per share fair value estimate for narrow-moat Charter Hall, as we transition to a new analyst. Securities in the property fund manager trade at 15 times our estimated fiscal 2024 operating earnings, versus an average of above 18 times earnings for boutique and diversified fund managers.