Property fund manager Charter Hall has forecast a bumper lift in earnings for its 2022 financial year, up by at least 72 per cent, after its second upgrade in two months, booking in hefty valuation gains across its diversified portfolio.
Investors rushed to embrace the upgrade, sending Charter Hall flying more than 5 per cent higher, or $1.05, to $20.79 by the afternoon.
With a valuation uplift of at least $3.5 billion along with a string of major deals, funds under management by the platform led by David Harrison is expected to hit $61.3 billion by the end of the calendar year.
As funds under management balloons, Charter Hall’s performance fees rise, pushing its fiscal 2022 operating earnings to at least $1.05 per security. In an early November upgrade, Charter Hall had flagged earnings of no less than 83¢ per security. Over the 2021 financial year, it achieved 61¢. At its annual results in August, Charter Hall had flagged guidance of 75¢.
“It is pleasing to see the hard work we have put into curating and growing high-quality portfolios for our fund investors over many years has delivered excellent financial returns, well above expectations and performance fee hurdles,” Mr Harrison said.
“The resultant performance fees, whilst positive for the group, also highlight the outperformance delivered for investors, given fund investors typically receive 80 per cent of excess total returns above the hurdles established at inception of the funds and partnerships.”
Nevertheless, Charter Hall’s distribution guidance remains unchanged, with 6 per cent growth forecast for fiscal 2022.
Later this month, Charter Hall will finalise its $1.68 million takeover of pubs landlord ALE Property Group, through a consortium including Hostplus and the separately listed Charter Hall Long WALE REIT.
The Long WALE REIT reported an 8.1 per cent valuation uplift across its portfolio on Monday, worth $529 million, pushing its portfolio above $7 billion. The Charter Hall-run fund has sold a Brisbane office campus in Bowen Hills for $70.9 million to Real Asset Management in a deal brokered by CBRE and JLL.
Another ASX-listed fund in the stable, the Charter Hall Retail REIT, posted an 8.5 per cent lift in valuations, worth $314 million, taking its portfolio past $4 billion.