Charter Hall Shows 2.8% decline in Values across Portfolio
15 June 2023
Charter Hall Group provided an update on property revaluations for the period ending June 30, 2023 showing an overall -2.8% decline in valuations.
The Group advised that approximately 98% of all platform properties have been independently valued, providing a net valuation decline of $1.9bn.
As a result of valuations and transaction activity to date, together with $1.2bn of development capex, Group Property FUM is expected to be circa $72 billion as at 30 June 2023.
Lower transaction volumes across the market have however made it challenging for valuers to understand the market, particularly in the last few months as base interest rates have edged higher.
The valuers have adopted cap rates on average 32bps softer than the December 2022 valuations, nothwithstanding that interest rates have moved 100bps higher.
The table below breaks down the asset movements by sector:
| Sector | Valuation movement (6 months) | Cap rate increases (6 months) | Jun-23 cap rate |
| Industrial & Logistics | +0.1% | 35 bps | 4.5% |
| Office | (3.7%) | 29 bps | 5.0% |
| Long WALE Retail | (7.8%) | 41 bps | 4.7% |
| Shopping Centre Retail | (2.5%) | 28 bps | 5.7% |
| Social Infrastructure | +0.8% | 18 bps | 4.8% |
| Platform Total | (2.8%) | 32 bps | 4.8% |
Charter Hall Long Wale REIT
CLW had 549 properties, or 100% of the portfolio by gross asset value independently valued as at 30 June 2023.
The valuations resulted in a $419.0 million, or 5.8% net decrease from prior book values. The overall portfolio value has decreased from $7.2521 billion to $6.833 billion and the portfolio average cap rate has expanded 36bps from 4.41% to 4.77%.
The unaudited impact of the valuations announced today represents an estimated decrease in the NTA per security from $6.23 as at 31 December 2022 to $5.652, reflecting a $0.58 or 9.3% decrease.
A summary of the CLW portfolio valuation by sector as at 30 June 2023 is outlined below:
| Sector | Prior book value (A$m) | Valuation change (A$m) | Valuation (A$m) | Prior cap rate | Cap rate movement | Current cap rate |
| Long WALE Retail | 3,096.7 | (240.2) | 2,856.5 | 4.33% | 0.41% | 4.74% |
| Industrial & Logistics | 1,489.4 | (36.0) | 1,453.5 | 3.94% | 0.31% | 4.25% |
| Office | 1,348.7 | (96.0) | 1,252.8 | 5.05% | 0.37% | 5.42% |
| Social Infrastructure | 1,023.6 | (17.2) | 1,006.4 | 4.14% | 0.29% | 4.43% |
| Agri-logistics | 293.9 | (29.6) | 264.3 | 5.64% | 0.56% | 6.20% |
| Total | 7,252.4 | (419.0) | 6,833.4 | 4.41% | 0.36% | 4.77% |
Charter Hall Retail REIT
CQR had 97% of the portfolio independently valued as at 30 June 2023.
The valuations resulted in a net movement of $164 million, inclusive of capex1, reflecting a 3.7% devaluation. The overall portfolio value has decreased to $4,289 million2 and the portfolio average cap rate has expanded 29bps from 5.28% to 5.57%.
The shopping centre convenience retail portfolio cap rate has expanded 29bps from 5.52% to 5.81% and the Long WALE convenience retail portfolio cap rate has expanded 29bps from 4.54% to 4.83%.
The unaudited impact of the valuations announced today represent a $0.28, or 5.6% decrease on the December 2022 NTA of $5.01. This excludes movements in working capital, derivatives and FX. These impacts are subject to audit and finalisation of statutory accounts .
Charter Hall Social Infrastructure REIT
CQE had 361 independent valuations completed for the period ending 30 June 2023, representing 100% of the portfolio1 by gross asset value.
The valuations resulted in a net decrease of $10.0 million or 0.5% on prior book values. The average passing yield on these properties has increased by 12 basis points from 4.85% to 4.97%.
Trading Chart for CHC
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