Good morning and welcome to Charter Hall Group's first half FY '26 results. Joining me today is Sean McMahon, our Chief Investment Officer, and Anastasia Clarke, our Chief Financial Officer.

Today, I will provide an overview of the highlights of a very active last 6 months, and then cover the usual funds under management, equity flows, valuations, operating environment, and finish with our property investment balance sheet portfolio. Sean then will take you through development activity and our sustainability initiatives, followed by Anastasia with the financial highlights.

We'll conclude with our outlook and Q&A. Turning to the group's highlights.

Operating earnings for the half were $239 million, or 50.5 cents per security, reflecting continued momentum across every segment of the business. This strong performance underpins today's upgrade to FY '26 guidance to 100 cents per security, representing 23% growth over FY '25.

Return on contributed equity continues our multi-year trend of generating above 20% returns, which has increased to 23.1% post-tax and over 28% pre-tax. FY '26 also marks the 15th anniversary of consistent dividend growth.

Over that period, dividends have grown at 7.8% CAGR, well ahead of historic inflation and the REIT peer group. Group FUM increased from $84.3 billion to $92.2 billion on a pro forma basis, which includes additional FUM created post-31 December, while property FUM rose from $66.8 billion to $73.6 billion.

During the first half, we had a very active total transaction volume of $9.8 billion. Acquisitions and development activity more than offset divestments, supported by positive net valuations, largely driven by rental growth as economic growth and increased tenant demand met with a severely reduced supply across all of the markets we operate in.

Our balance sheet remains exceptionally strong, with balance sheet gearing of just 7.7% and $1 billion of dry powder providing for accretive acquisition capacity, which contributes to the more than $7.8 billion of total platform deployment capacity. Importantly, we also recorded the strongest level of gross equity flows in our funds management business in our 3.5-decade history.

On slide 5, the investment management business secured $4.8 billion of gross equity inflows during the half. Inflows over the past 6 months have accelerated materially, exceeding the prior full 12-month period.

We also are pleased to report average annual inflows over both the last 5 and 10-year period at close to $4 billion annually, highlighting our consistent capacity to attract inflows through cycles. Total transactions were $9.8 billion, comprising $6.6 billion of acquisitions and $3.2 billion of divestments.

Acquisitions, development completions, and valuation growth, as I said earlier, comfortably outweighed divestments. Turning to slide 6 and our strong earnings growth history.

Operating EPS has tripled over the past decade, delivering a 12.6% CAGR, while distributions have grown at over 10% per annum. Around half of our post-tax earnings are reinvested back into the business, funding growth in property and development investments.

This enables us to invest alongside capital partners, expand our funds management earnings, and generate strong return for security holders without the need to issue new public market equity to grow. This is a key competitive advantage we retain, and we will continue to organically grow the business through the retention of earnings via our payout ratio policy.

Given our capital-light business model, this is a powerful and sustainable driver of organic earnings growth. Slide 7 highlights the long-term strength of our distribution profile.

Over the past 16 years, Charter Hall has delivered consistent dividend growth higher than the growth rate of US REITs currently included in the US S&P 500 Dividend Aristocrats index. Slide 9 provides a deeper look at our property funds management platform.

Institutional investors contribute over 76% of total platform equity, while more than 82% of our property funds under management is across the unlisted wholesale and direct channels. Investor demand for unlisted property remains strong, reflecting the safe haven characteristics of Australian real estate and the diversification benefits unlisted assets provide amid heightened listed/liquid asset class market volatility.

Turning to slide 10, property FUM increased from $66.8 billion to $73.6 billion on a post-balance-date acquisition-adjusted basis, driven by acquisitions, development completions, positive valuation movements, and of course our previously announced Challenger mandate, which was secured during the half. Growth was led by the wholesale unlisted platform.

This reflects early signs of valuation recovery and the benefits of disciplined portfolio curation across all three of our listed REITs, which has helped deliver meaningful earnings and NTA value growth for those REITs. Property FUM has now surpassed the peak achieved in June '23, before the devaluation cycle the market experienced.

With $7.8 billion of available investment capacity, we expect further growth through acquisitions, valuations, and ongoing develop-to-hold strategies over the remainder of FY '26. Our property platform, as highlighted on slide 11, comprises over 1,600 assets, spanning 11.5 million square meters of lettable area, with 97% occupancy and a market-leading 7.5-year WALE, or weighted average lease expiry.

Our integrated property management team secure more than $3.6 billion in net rent each year, a critical metric as rental income underpins everything we do. I&L, or industrial and logistics, is our largest sector exposure at 37% of the platform, whilst convenience retail continues to grow and now represents over 20% of the platform.

Our office platform at over $26 billion is the largest in the country. We are seeing encouraging early signs of recovery, and we're actively planning increased development and deployment in high-quality CBD asset locations, whilst we're also repositioning opportunities, such as the recent acquisition of 1 O'Connell Street and the adjoining assets in the core of Sydney CBD, which, on a combined site area basis of approximately 6,800 square meters, is one of the largest site consolidations in Sydney CBD, alongside our 7,500-meter Chifley site, which, as you're all aware, we're well-progressed on developing a second Chifley tower, which, on a combined basis, will generate over 110,000 square meters of lettable space in two adjoining premium-grade towers.

Turning to equity flows. During the half, funds management secured $4.8 billion of equity inflows, a record for a 6-month period across the history of the group.

Inflows were broad-based, spanning all three wholesale pooled funds: CPOF, our office fund; CPIF, our industrial fund; and of course our recently launched CCRF, or convenience retail fund. Partnerships have also been a strong contributor, including the Challenger mandate I mentioned, and we have seen a notable uplift in fund or equity flows for Charter Hall Direct, which in 6 months has exceeded all the flows generated in the whole of FY '25.

Slide 13 summarizes our industrial platform. We manage over 7.2 million square meters of lettable area, representing $27 billion of funds under management, and importantly, close to a 20 million square meter land bank across that portfolio, making this the largest third-party industrial platform in Australia.

The portfolio is modern, most of which has been developed by Charter Hall, attracting a high occupancy, and is underpinned by long WALEs, strong leasing renewals achieved during the half, and importantly, we still believe the portfolio has got a 17% discount to market rents, providing positive rental reversions over the course of coming years. Our development pipeline sits at $6.5 billion in industrial.

This is underpinned by a significant land bank of over 223 hectares, and I also note our recent media announcement on a new 20-year lease on a 100,000 square meter facility to ALDI at one of our largest states in Melbourne as an example of the ongoing pre-committed development activity we are completing within the industrial platform. Slide 14 outlines our office platform, clearly Australia's largest at $26 billion, with 2.1 million square meters of lettable area.

Leasing momentum was strong, with 124,000 square meters leased across 134 transactions during the half. Net effective rents outpaced face rent growth, and 93% of tenants were retained in their existing or expanded footprints.

Occupancy remains high at 95% relative to peers and clearly relative to the market, well ahead of our broader aspirations for occupancy. I also note that in a strongly improving net effective rental market, it's also helpful to have a bit of vacancy so you can capture those positive market rental growth reversions.

I anticipate that you'll be hearing a lot more from us on various office activity as we move forward. We are positive on the outlook for our assets and also deployment as this market is clearly, at least for quality CBD holdings, in the early phase of what could turn out to be a sustained and attractive recovery for office landlords.

Our convenience retail platform on slide 15 manages around $15 billion of assets, or over $17 billion including our long WALE Bunnings assets. The sector represents a significant long-term opportunity given limited institutional ownership and the increasing difficulty of replicating well-located assets in inner and middle-ring metropolitan markets.

Last year's successful takeover of HPI was just another example of us expanding our long WALE convenience retail platform, and recent acquisitions of Bunnings portfolios, such as the $290 million sale-and-leaseback acquisition we closed with Bunnings in the last half, is further evidence of our conviction to grow into the convenience net lease retail sector with the market-leading tenants in each of those sectors. When we think about barriers to entry in this submarket, including land availability, zoning, scale, and capital, we do believe that Charter Hall has a durable competitive advantage in securing further growth for our investors.

More importantly, it's also providing another string to our bow when we talk to our tenant customers around curating their existing lease portfolios, but also being able to fund sale-and-leaseback transactions if that suits these major retail customers. Slide 16 and social infrastructure remains a core strategic focus.

These assets provide essential services, exhibit low correlation to economic cycles, and are among the lowest-risk property sectors. With Australia's growing population, demand for these services will only increase, and Charter Hall is well-positioned to play a leading role across all aspects of social infrastructure, from government-leased essential service assets through to childcare.

The portfolio is 100% occupied, supported by long WALEs, and predominantly triple and double-net leases. Now just looking at our tenant relationships on slide 17.

Our top 20 tenants contribute 53% of platform income. We manage over 5,300 leases, collecting more than $3.6 billion in net annual rent.

Over 69% of tenants hold multiple leases, enabling deep, long-term relationships across assets, locations, states, and sectors. During the half, we were highly active with renewals, expansions, and sale-and-leaseback transactions virtually across every one of the sectors that we operate in.

Long-term tenant partnerships remain a cornerstone of our broader strategy. Slide 18 and our transactions.

As mentioned earlier, we completed close to $10 billion during the half, with net activity up strongly. Office and convenience retail were the largest contributors to acquisition growth during that 6-month period, whilst we continue to actively curate our industrial portfolio.

Slide 20 provides an overview of our property investment portfolio, which, those of you not familiar with the terminology, represents the Charter Hall on-balance-sheet investment portfolio. The $2.8 billion portfolio spans over 1,500 properties, 97% occupancy, and an 8.2-year WALE, and a 3.3% weighted average rent review.

That is reflective of our co-investments predominantly in all of the funds and partnerships we manage. In addition to that, we also have curated property investments on-balance-sheet, generally for warehousing, to provide assets that will attract further external capital.

Cap rates compressed by 10 basis points over the half, with the weighted average discount rate now at 7%. Geographically, New South Wales or Sydney represents close to 40% of our exposure; Brisbane, predominantly Brisbane or Southeast Queensland, and Victoria, each around 20%.

Our balance sheet exposure to office is deliberate. We believe these assets offer most attractive perspective IRRs, will attract external capital, and provide income uplift potential across the platform over the next 3 to 5 years.

With that, I'll now hand over to Sean to cover development activity and sustainability.

Thanks, David, and good morning to everyone on the call. Our development pipeline now totals $17.9 billion.

Our development capability and track record has been a significant key strength of the group for over 30 years. Develop-to-own generational assets are highly accretive to long-term returns for our investor customers.

Development activity continues to drive modern asset creation, providing property solutions for our tenant customers, and enhancing returns whilst attracting new capital to our funds and partnerships to deliver on strategic objectives. Development completions total $1.3 billion in the last 12 months, and notwithstanding completions, the pipeline continues to be restocked, and is currently $17.9 billion.

There are currently $4.8 billion in committed developments, with 74% of committed office developments pre-leased, and 94% of committed industrial logistics developments pre-leased, providing de-risked, adjusted, accretive returns for our funds. We have generated a $5.5 billion dollar pipeline with living and mixed-use projects that have now obtained strategic planning approvals, optimizing existing holdings and providing optionality to grow in the living sector.

The successful SEPP planning approval of Gordon Shopping Centre, that potentially delivers a mixed-use, multi-stage project of $1.6 billion dollars end value, was the material addition to the pipeline in the first half. Noting David's previous comments on Australia's strong forecast population growth, we expect that the creation of new, developed investment stock and opportunities for investment management platform will continue to feature prominently.

Now turning to slide 24. Over the first half, our industrial platform completed $515 million dollars of developments with a WALE of 10 years.

We currently have $2.3 billion in industrial development projects committed and underway. Our total pipeline of future industrial investment-grade stock now sits at a material $6.5 billion.

There are three major projects driving the pipeline growth pre-committed by Australia's major supermarket retailers: Coles, Woolworths, and ALDI, that have a combined completion value of $1.5 billion that will deliver state-of-the-art automated facilities to service their respective networks. There is also good momentum at our Western Sydney Airport joint venture site, where there are multiple major pre-commitments secured or at advanced stages.

Charter Hall has one of the largest industrial footprints in the nation, comprising over 20 million square meters of land, and we are focusing our efforts to maximize for our investor customers from the land we own. Given the scale and diversity of our landholdings, there are multiple key data center sites existing in with this industrial land bank.

There are a number of data center sites in focus in our land banks that are located within availability zones, and we are in the process of unlocking significant power supply and associated planning approvals over the next few years. Importantly, we retain optionality to sell this powered land at a material premium to industrial land values, or negotiate long-term ground leases with hyperscalers, as we have done before.

Now turning to slide 25. The Chifley precinct, which includes the existing North Tower and the South Tower where construction is progressing well, will eventually have a precinct value of approximately $4 billion dollars.

The project is Sydney's premier office address and will be Charter Hall Group's largest asset, with a combined net lettable area of 110,000 square meters. The project is scheduled to complete in mid-'27, and is owned by various Charter Hall managed wholesale investment vehicles.

Our wholesale clients are participating in the investment with the objective of long-term retention of this iconic asset. As you can see, the group has been very busy delivering new, high-quality office developments across Australia, anchored by government and tier 1 tenant covenants.

Now turning to slide 26. We continue to drive our industry leadership across all facets of ESG, demonstrated by recent GRESB global and regional awards, with 18 of the group's funds in the top quartile, and notably, five CHC funds were ranked in the top 10 global funds.

Our listed entities achieved an A ranking under the GRESB public disclosure rating, and a AA MSCI rating. Pleasingly, we have now installed 89.7 megawatts of solar power across our platform, and this equates to sufficient power for approximately 20,000 homes, and our green loans now exceed $8 billion dollars.

From July '25, our whole platform operates as net zero through existing on-site solar and renewable electricity contracts. I'll now hand over to Anastasia to discuss the financial results in more detail.

Thank you, Sean, and good morning to everyone on the call. The first half of FY '26 delivered strong operating earnings after tax of $238.8 million, representing an increase of 21.6% on the comparable prior period.

Top-line revenue growth was driven across all three segments, comprising property investment income, development investment income, and funds management revenue. Growth in property investment income was underpinned by like-for-like funds income growth of 4% on our co-investments, together with a material contribution from the incremental deployment of $290 million net equity investment over the past 18 months.

This results in a full-period contribution of the FY '25 investments, and partial-period contribution from the year-to-date investments to PI EBITDA, all on significantly higher equity PI yields. Development investment EBITDA has increased to $38.1 million, representing approximately 10% of the group's EBITDA, achieved through the successful completion of developments, primarily sold down to funds.

Funds management EBITDA remains in line, which follows the usual historic pattern of strong equity inflows in the half, translating to fully annualized funds management fees in the following financial year post a period of deployment. Underlying FUM growth through valuations and net acquisitions and progressive funding of the $4.8 billion platform-committed development pipeline is supporting growth in base fee revenue and transaction fees, offset by higher operating costs.

Pleasingly, the group is reporting a healthy statutory profit after tax for the first half of $272.8 million, reflecting the combination of operating earnings and positive property revaluations. OEPS increased 21.6% to 50.5 cents per security, whilst DPS continues to grow consistently at 6%.

This results in approximately half of the group's earnings being retained for reinvestment, primarily into higher-yielding property investments. As noted earlier, this reinvestment is meaningful in scale, underpins growth in property investment EBITDA, and provides a pipeline of assets to create new funds.

Slide 29 provides further details on funds management earnings. Funds management base fees increased by 5.3% in the first half, driven by higher FUM arising from valuation uplifts and net acquisitions.

Transaction fees are materially higher at $32 million, reflecting large transaction volumes, with net acquisitions supported by high equity inflows across the platform, most notably within CCRF. Property services revenue was lower in the first half due to elevated leasing fees in the prior period.

Notwithstanding this, the group expects a sizable positive skew across all property services revenue in the second half of FY '26. Variable operating costs has increased in first half '26 to $73.5 million, reflecting employee and payroll tax accruals.

Overall, this resulted in FM EBITDA of $142.3 million for the first half. Importantly, elevated net equity inflows lead to future deployment, resulting in full contribution to funds management fee revenue in the following financial year.

Turning to the balance sheet and total returns on slide 30. The group's balance sheet investment in the property investment and development investment portfolio has increased to over $2.8 billion, and pro forma adjusted for post-balance-date deployment, including investments such as the O'Connell precinct in Sydney, exceeds $3 billion.

Positive revaluations and retained earnings during the half has driven an increase in NTA to $5.54. Gearing remains low at 7.7%, and subsequent to balance date, the group has added $400 million of new undrawn debt lines, together with existing cash providing investment capacity of $1 billion, positioning the group well to pursue investment growth opportunities.

Further refinancing across existing bank debt lines to extend tenor, combined with new bank lines, results in a lower margin and line fee of 22 basis points in the second half. Total returns continue to grow, with the group delivering an after-tax annualized return on contributed equity of 23%.

Maintaining strong return metrics is fundamental to ensuring optimal deployment of both the group's capital and that of our partners. This continued focus on total return outcomes ultimately generates long-term earnings growth and sustainable value creation for our investors.

On slide 31, similar to the group's balance sheet, we had a highly productive half-year which continues, raising $10 billion year-to-date of new debt and refinancing existing debt across our funds management platform, supported by favorable credit market conditions. We expect the pace of refinancing to further accelerate in second half through to 30 June 2026.

Credit appetite from our lending partners, including both domestic and international banks, remains very strong. This is evidenced not only by the significant new and extended loan volumes completed year-to-date, but also in wider covenant headroom and lower credit margins averaging savings of 27 basis points.

This debt financing activity has increased investment capacity to $7.8 billion, providing additional flexibility to deploy capital across a range of various real estate strategies and opportunities. Whilst the RBA cash rate and market floating rates remain higher than previously expected, we have progressively implemented hedging throughout the first half across funds, providing protection against earnings volatility in both FY '26 and FY '27.

Overall, the group has achieved a 10 basis points lower WACD across the funds management platform as at 31 December, compared to 30 June 2025. Before handing back to David, in summary, the first half of FY '26 represents a strong earnings result.

The combination of elevated equity inflows and balance sheet capacity positions the group well to deliver ongoing FUM growth and sustainable future earnings growth.

Thank you, Anastasia. Turning now to slide 33 and our earnings guidance.

I'm pleased to advise that due to strong performance within our investment and property services business, today we are providing a further upgrade to earnings guidance for FY '26. Based on no material adverse change in current market conditions, FY '26 earnings guidance is for post-tax operating earnings per security of approximately 100 cents per security, which represents 23% growth over FY '25 earnings, and an additional 5 cents above the AGM upgraded guidance provided of 95 cents.

This earnings guidance excludes any expectation for performance fees. FY '26 distribution per security guidance is for 6% growth over FY '25, continuing a 15-year history of annualized DPS growth.

That now ends the prepared remarks, and I now invite your questions.

Oh, thank you. Good morning.

Great results, guys. A couple of quick questions from me.

Firstly, on the CCRF fund, you called out $2.4 billion of gross equity. Can I just confirm how much of that has been [ex-filled?]

in terms of transacted upon, and what capacity does that give you in the second half, please?

Thanks, Suraj. The answer is that there's another billion dollars of acquisition capacity over and above what we announced or issued in the media today with another $360 million portfolio acquisition.

The other part of that capacity is we're continuing to raise equity in CCRF. I think that dry powder will accelerate over the next few months with further inflows.

What typically happens with these open-ended funds is that, particularly with the scale and diversity of the LPs that have supported that fund, I think we're going to see an acceleration in both domestic and offshore wholesale investor inflows into that fund. Whilst it might be a billion of dry powder now, I'm expecting that to continue to grow even as we deploy further.

I don't sort of really give guidance on how much I expect to acquire further in the second half, but it's fair to say, with today's announcement of 360 and various other acquisitions, I expect it'll be a pretty strong contributor to further FUM growth in the second half.

Thanks for that, David. Maybe just one question for you.

You obviously called out a very favorable backdrop, record inflows. Yet, we have seen 10-year rates move up pretty strongly and even the longer-term rates in the US are up pretty strongly in the last let's say a few months.

Is that having any impact on the discussions you're having with capital partners with respect to property investments?

I think it'd be naive to say that a movement in bond yields doesn't have an impact. The only thing I'd say is before we even went into this almost hysterical view on multiple interest rate rises, there was already a pretty strong gap between bond yields and unlevered IRRs and levered IRRs that we can deliver to our capital, both in core, value-add, and opportunistic.

I think the demand still exists. I've said it before, even though there's been some corrections in stock markets around the world, the reality is that most of the capital we talk to are underweight their strategic allocation to property.

A lot of our capital have experimented in various forms of alternatives, some of which have blown up completely, some of which have been highly disappointing in terms of the return you should be getting when you're going into sort of new sectors. I think there's both absolute underweight pension capital, and I think we're also going to see further reallocation away from some of what I call the alternative experimental investments we've seen in the last few years back to really good quality core, particularly when in all core sectors, office, retail, industrial, you're buying existing buildings way below replacement cost.

I'll call out things like office where we went through a period of quite elevated rising incentives, and incentives are coming down, and so effective rental growth is outpacing face rental growth. It will become a strong deliverer of good total returns.

As I've said before, because cap rates in office are virtually 150 bips above where they were pre-pandemic, whereas other sectors have more or less got cap rates back to pre-pandemic cap rates, the total return proposition for prime office is pretty strong. I think we'll continue to get good demand in convenience retail, logistics, and I think, as I've said on a couple of occasions, I think office might surprise everyone over the next 2 or 3 years.

Overall, yep, I don't really see the latest sort of gyration in long-end bonds sort of materially having an impact for all the reasons I just outlined.

Perfect. If I can just ask one last question from Anastasia, please.

Around the costs in the funds management division, the $73 million, that seemed reasonably high compared to a first half last year. Is there a skew, Anastasia, there to the first half this year, or maybe expectations for the full year, please?

Thank you, Suraj. Not a particular notable skew to call out.

I did say that it's variable costs, employee costs, and payroll tax, and it's really associated with the outperformance we've achieved in the business. You've seen two earnings upgrades, and associated with that outperformance, obviously subject to board discretion, but there's an accrual there for further short-term incentive and the payroll tax that goes with that.

Thank you.

Morning Dave, Sean, Anastasia. Thanks for your time.

First question was just, I guess, in relation to the volatility in global capital markets that you referred to in your opening remarks and the result announcement. You've mentioned that that's increased the institutional demand for Australian property.

Just wondering if you've got any data points around this. Are you seeing an uptick in year-to-date inbound inquiry and appetite to deploy on the platform?

Look, as a broad statement, and every pension fund or super fund is different, but what we're seeing is a reduction in allocations to international listed equities. I'm not sure I'm necessarily seeing an absolute reduction in allocations to domestic equities.

If you sort of think about the private markets, and most pension funds have people running listed equities, fixed income, and private markets, and within private markets you've got property, infrastructure, and private equity, we are seeing globally a lower new investment into private equity because it's well-understood that private equity has materially increased their investment holding periods, and therefore the cash coming back to investors out of realizations from private equity has severely been reduced. We think we will be a beneficiary of incremental dollars not going into PE and sort of coming into property.

Infra has obviously sort of performed pretty well, but it's often very lumpy the new deployment opportunities that exist. All of that sort of puts it into, I think, property into a basket that will have demand.

Then when you split the world into regions, I'm not sure we're seeing a lot of narrative around incremental investment into US property from global investors who would need to make a choice where they want to invest. We're certainly seeing a good acceleration in demand out of European pension funds wanting to sort of invest in Asia-Pac.

The backup in bond yields in Japan is actually helpful, because most Asia-Pac core capital really doesn't see core markets outside of Japan and Australia. Most of the other options are sort of seen as a little more volatile and higher risk.

With the backup in bond yields in Japan, there's some question marks around whether or not the 30-year yield spread play where there's not a lot of capital growth and/or potential negative capital growth, now a lot of people are starting to wonder whether there is going to be negative capital growth with the backup in Japanese bonds. All of that sort of means we're getting accelerated demand for investment in Australia, and, as the biggest player in the country across all the sectors, we're a natural port of call for this capital.

We just don't wait for them to walk into 1 Martin Place. I got a team traveling the world regularly, talking to capital.

I sort of feel that we're in a good position. Australia is generally in a good position, and I think we're going to see, as I said earlier, both core, value-add, and opportunistic risk capital wanting to get deployed in Australia.

That's good color. As a follow-up to that, would you have an estimate of where property allocations might sit versus their strategic asset allocation targets?

I know we have good visibility into the Australian superfund data, but less into offshore. Oh,

mate, I think even the Australian superfund data is very different whether it's a defined benefit fund and accumulation fund, but as a broad cross-section, and this is all available on APRA, I'd say domestic super allocations to property could range anywhere between 6% and 13%. We've found global capital typically would have a higher allocation at the bottom end, and in some cases I've seen allocations up to 17%, 18%, but if you wanted a rough rule of thumb, I'd say 9% in domestic and 10% or 11% to 12% for international capital.

Then, depending on the particular partner, whether European whether it's a pension fund or a sovereign wealth fund, some of them are very opaque in their weightings, it's difficult. All I care about is do people have incremental appetite, and everyone I talk to's got incremental appetite.

That hopefully gives you the color.

Thanks, David. Maybe just final question for Sean.

Just on the $5.5 billion living and mixed-use pipeline, can you just give us some math of how you've built up to that amount? Maybe just how many lots, rough area, value per square meter?

Can you just confirm whether this is assuming you hold 100% of the project equity at the end, or do you assume that you bring in a capital partner for a part of that stake?

Thank you. Look, that's the pipeline completion value on the assumption that we build out these strategic planning approvals we've delivered over the last year or so.

In terms of optimizing our existing assets, which is the real strategy, that's a big accomplishment which leads to the $5.5 billion. More recently, a material addition was Gordon Shopping Centre, where we just got a SEPP amendment for a potential $1.6 billion mixed-use project.

We now have the optionality to bring in new partners to strategically develop these assets out, or we can optimize the existing assets as they are and trade them for a premium. I think the main thing is we have optionality now to grow in these sectors, which is a new thematic, if you like, in the living space.

I might add that over the last 5 or 6 years, since we've owned Folkestone, we've built out about six in globo residential subdivisions, which has been very successful. It's not a brand-new sector for us, but we're just optimizing the existing assets that gives us optionality to deliver future earnings in different spaces in the future.

Do you want to add to that, David?

I'd just add, over 95% of the gross completion value is build-to-sell. One of the reasons why pension capital likes build-to-sell is over the course of a sort of 3 or 4-year project, they know they're going to get their money out plus their profit, because that's the nature of build-to-sell.

There is absolutely no way we're funding any projects without majority external capital. I think that answers your question.

I think the other thing I'd say is that we're probably, when you think about this pipeline, we've added value to assets that we already own in the platform. We're not going out there buying overpriced Sydney land, which has been the case for a lot of people trying to do residential.

We're actually cultivating and adding value to our existing owned assets or managed assets. It's quite a different model, but depending on market cycles and obviously us attracting external capital when we're ready to go, that's how these things will get developed out.

Got it.

That was very clear. Thanks for your time, guys.

Oh, good day, everyone. Hey, David, you talked about pretty successful fundraising campaigns over the last 6 months.

Just wondering if you think office market now has stabilized to a point where flow of equity could come rushing back into CPOF, because from memory, you're going to kick off a capital raise there, right? Have you got any insights for us?

Yeah.

No, we've already recently raised a quarter of a billion in CPOF. I think, as I said before, Simon, when I look at like-for-like cap rates for prime office versus the other sectors, they've got the most cap rate compression just to mean revert back to pre-pandemic levels.

I think all the hysteria around work-from-home is dissipating quickly. You only have to look at the occupancies, the vibrancy in both Sydney and Brisbane.

Obviously, Melbourne is going to have a slower recovery, but it also has got very little new supply, and we're starting to see double-digit, unbelievably, double-digit net effective rental growth coming through in the Paris end of Melbourne, albeit off high incentive levels, but so, yeah, I think I've been saying for 12 months, I think you might find over a 5-year period, office is the sleeper in terms of inflows. Do I think that's going to be the next 6 months, 12 months, 18 months?

I don't know. I can say we're having a lot of constructive discussion with investors, and the smart ones who realize you want to get in early in a recovery cycle, not at the later end of it to maximize your IRRs, are having a really good look at jumping in now.

If you look at our acquisition of 1 O'Connell Street, that's a pretty big statement about where we think really strong potential growth is going to come in the prime core of Sydney. All I can say is that we're looking to play that office recovery across core, value-add, and opportunistic.

I think there's a bit like I was saying about build-to-sell on our existing assets, it's pretty hard to go out there and buy a block of land and make things work. Quite often, as we've done with Chifley, we'll cultivate what we've already got.

In Melbourne about 8 years ago, we built another 26,000 meters on an existing 30,000-meter building, effectively didn't owe me anything on the land, and I created 2,500-meter floor plates on the bottom 10 levels. I think there's different ways that you can play that market.

I think office will provide sort of outsized, going-forward equity IRRs compared to other sectors, and there'll be some that are sort of smart enough to get in early, and then there'll be others that wait for a couple of years of solid NTA growth before they sort of jump back in. That's the sort of landscape we're looking at.

Fair enough. If I think about your guidance, originally you were guiding to 90 cents for the year, and now you're guiding to a dollar.

Especially over the course of the last 6 months, David, you found an extra $50 million somewhere, right? That's a sizable number.

I know in your prepared remarks, you kept saying, 'Oh, business is better,' but $50 million is a big number. Did you just completely misread the market back in August, or where's the bulk of the $50 $50 million coming from?

If you think about $4.8 billion of inflows in 6 months, which is probably higher than any full-year inflow we've ever had, even with my optimistic outlook, I didn't think we'd sort of raise that amount of capital. Obviously, there's some wins in there that we wouldn't have necessarily anticipated at the start, like the Challenger mandate.

There's a few other things that are happening in the second half that we'll eventually announce. We've also done I think a good job in further recycling equity we had, selling it down to capital partners, and then redeploying into new investments that has helped drive the PI line.

Look, I've said it before, Charter Hall has historically been able to deliver very, very strong and consistent multi-year earnings growth after a correction cycle. Mate, you're an analyst, you have a look at the history of Charter Hall's earnings.

We're in a positive momentum situation, but the last thing I'm ever going to do is over-guide based on, 'Oh, I might raise $4.8 billion of equity in 6 months.' I'd prefer to guide where we have visibility, and if we can deliver upside through further deployment, particularly further equity flows, that's the way we've run the business for 21 years since it was listed.

The other thing I'd say is, and I've called this out before, there's a bow wave or delayed impact on revenue and hence earnings from strong inflows. If we have $4.8 billion in the first half, you won't see an annualized impact on that until FY '27.

If we can have another strong inflow year in the second half, we've got an even bigger record of inflows in FY '26, the bow wave effect means you're not going to see a full-year annualized revenue and EBIT impact from that till '27. This is why we're pretty constructive about the future, and obviously myself and the rest of the 600 team are out there raising more equity, continuing to do active leasing, and grow the business.

Hopefully, that gives you the answer that you wanted. If you're asking me why I didn't know we'd be at a dollar when we guided 90, well that's the answer.

Fair enough, David. Thanks, that's all I've got.

Cheers.

Thanks, Channy.

Hi, good Morning, David and team. Thank you for the presentation.

I just wanted to clarify something on CPOF. You've done 11.5% return over 10 years, since inception.

It's probably best with the match. Is that in performance fee territory for '27?

Mate, I don't give you 1-year forward guidance, let alone 2-year forward guidance on anything. All I'd say is, you'll recall we generated performance fees out of CPOF in FY '19 and FY '20.

As you point out, there's another measurement period in '27. What I would say to you is we're going to need a decent level of cap rate compression to get that back to the high-water mark, because your IRR calculation on all performance fees always goes back to time zero and has regard for previously paid performance fees.

I wouldn't say it's out of the question, but I certainly wouldn't say it's in the money at the moment.

All right. Then, just second question on the $5.5 billion mixed-use opportunity.

How do we think about the timing of getting funding? Do they go to market for that?

It sounds like you've got all the pieces of the puzzle together, there's strong demand in that sector.

You're talking about residential?

The $5.5 billion. Yeah.

Mate, it's all about market cycles, some of those have got a stage 2 planning approval, like 201 Elizabeth Street, and would be ready to go. Similarly, Westmead.

Gordon needs to go through another stage before it's fully ready to go. They're all income-producing brownfields opportunities, we're in no hurry.

What I call the planets aligning is: A, having vacant possession and planning approval; B, having external capital partners to fund it, with us maybe doing a bit of a co-investment; and more importantly, our team having conviction that it's the right time to go. Now, if you think about build-to-sell, you're not going to start construction on any build-to-sell without a significant level of pre-sales, if I sort of think about all of that, you need the planets to align, including pre-sales, you can get non-recourse project finance, like anything, you got to match the equity funding with the debt funding, and pre-sales for you to start construction.

That's how we're going to prosecute those development opportunities. Whilst residential, particularly luxury res, such as 201 Elizabeth Street, is strong, we think there'll be very, very strong demand for something like Gordon.

The reality is you've got to make all the planets align, including getting fixed-price construction contracts that make sense. Fortunately, we're starting to see some deflation in construction pricing in industrial, where we've let a lot of building contracts well below what it would have been a year ago, but it's still, it's not easy, as you've probably heard from some of the on-balance-sheet resi developers.

It's not easy to sort of lock down decent pricing on construction. They're all work in progress.

As I said, for the time being, we're getting good passing yields on those assets in the various funds and partnerships that own them.

All right, thank you.

Hi, David and team. I'm just trying to reconcile.

First half, you've done $6.6 billion in acquisitions, transaction revenues $32 billion $32 million. Last financial year, you did about half the transactions and the same transaction revenue.

Is there some unrealized acquisition fees there? Are they going to fall to the second half?

Have you had to give away just structuring of the different funds, some not having acquisition fees? What's really going on there?

When CQR put its seed assets into the core retail fund and swapped part of them as a equity investment in that fund, we're not charging CQR divestment fees, it's a good question, but what I'd guide is that not all of the transactions are generating fees if there's that sort of related party transaction. The other thing is that there is a bit of a deferment on transaction revenue.

If something wasn't completely unconditional at 31 December, it'll become a second-half transaction fee. Of course, as you'd expect, it's hard to charge a client like Challenger gives you a mandate an acquisition fee when they already own the assets.

That's the reason why when you look at those transaction fee revenue numbers versus the volume, it looks a bit different to prior years.

That's pretty clear. On the $1.9 billion of post-balance-date acquisitions, would those be generating any fees?

Yep.

In second half.

Acquisition fees

in the second half, yeah.

Correct. Okay.

Then, just thinking, if you just double first half, you probably going to see some growth in PI and FM, we're above 100. What's going to be dragging it down?

This is my 21st year doing this, and you guys always do the same thing: you just double all the first-half metrics to get to a full-year number. It's not that simple, and there'll be various items.

It's hardly a first-half/second-half skew at 50.5 versus 49.5, I wouldn't get too excited about why aren't you doubling everything to get to a higher number.

That's somewhat clear.

It's about as clear as I'm going to be, but, look, what I would say, and I said it earlier, we have an expectation for the second half which has sort of guided our recommendation to the board who signed off on the guidance. If, like the answer I gave to Chan earlier, we pull off some miraculously great deals or inflows that drive revenue and EBIT above our expectations, then we might beat that guidance, but at this stage, we're pretty comfortable with that guidance.

As I said earlier, I think you guys should be thinking about the bow wave effect and what this sort of equity flow and FUM growth is going to do on an annualized basis into '27 and beyond.

Great. Congrats on the result.

Thanks. All

right, thank you.

Good morning, David. I just have a question on the operating expenses.

Historically, there has been a skew to the second half. How are you and the team seeing the composition for this financial year?

Anastasia?

As I said earlier, we're not seeing a very significant skew. You should see it as fairly in line in terms of the expenses we've reported in the first half as indicative of second half.

Thank you. That was my question.

Thank you.

Thanks, Ben.

Good morning, David. I just was interested in your acquisition of 1 O'Connell post-balance-date.

I notice that's not in the development pipeline for office. I'd just be interested in your thoughts around that project, the potential to maybe take on board the other 50% over time, and what scheme you think makes sense for the site?

When you buy a site consolidation, that's cost a vendor a lot of money, and we're buying it well below what they accumulated it for, I wouldn't necessarily think the highest and best use is bowling over five buildings and creating 100,000-meter tower. We like that because we effectively think that we've got optionality, the sum of the parts and the realizable value on each of those buildings once Charter Hall adds its active asset management, it may well be a much better outcome than doing a major development, whether it's 100,000-meter single tower or two 50,000-meter towers.

We and our partners are just looking at that with lots of optionality. Clearly, we have a preemptive right over the other 50% when and if that fund decides to sell.

Given what's happening with that series of funds, I'd be surprised if they don't go down a path of looking to sell it, and if they do, well, we've got a preemptive right to look at it at sensible pricing. Because of all of that and because it's a stage 1 DA, not a stage 2 planning approval, I wouldn't see any potential development scheme, as I said, whether it's one 1 tower or 2 towers, sort of coming into our uncommitted development pipeline until we went down that path, if, in fact, we even go down that path.

I think that's the best way to answer it. There's no doubt with a stage 1 planning approval for 100,000-meter tower, that virtually has to be worth $40 grand, $50 grand a meter by the time it's built.

It's $4 or $5 billion of built form, so that is the way I sort of look at it, but by the same token, unless it beats an alternative strategy, which is our base case, we won't be doing 100,000 meters of development on that site. Yep,

that's very clear. Then maybe just a follow-on question just around the valuation cycle's clearly troughed, all the REITs have seen positive revamps, but if you look in the sort of smaller-mid end of the sector, there's still some pretty significant discounts to NTA.

How do you see that evolving, and what opportunities do you see in the listed sector over the next few years?

As we've been running prop securities money for a long time, ebbs and flows, but if you sort of roughly say we got roughly a billion dollars in our various prop securities funds invested in the REIT sector, I think there's some dogs out there, and I think there's some really cheap buys. As an investor in REITs on behalf of the balance sheet and our capital partners, I think there are some good buying.

If you look at my three REITs, just cuz the market trades them at a discount to NTA doesn't mean that me or the rest of the direct buyers in the world don't think that NTA is real. You only have to look at how much money we've raised in our retail fund at NTA to show what the wholesale world thinks.

We're just going through a normal listed cycle where the listed market is punitive on good-quality portfolios for macro reasons. Doesn't mean I think the listed pricing knows what it's doing.

If you look at the history of this group, when the listed market is not pricing is correctly, we've taken opportunities to take REITs private, I don't see that being any different over the next 10 years for the last 15 years. We're not going to jump into something we don't like, and as I said before, the sort of planets have to align for that to work.

If listed markets keep mispricing things, well, yeah, I think whether it's us or others, you're going to see a continuation of REIT take-privates. You've already got NSR on the block.

We did HPI last year. A bit like that virtually half of the listed infrastructure sector, it's all gone off the bourses because the wholesale capital was prepared to price the assets different to the listed market.

I don't see it being much different, to be honest.

Thanks very much.

Okay.

Good morning, David, Sean, Anastasia. Thanks for your time.

Just first question on Chifley South, if I could. 60% committed, just curious to know how you're thinking about the pace of the lease-up and any anecdotes on current interest levels that you can provide, please?

I'm in no hurry. All of our internal forecasts suggest to me we're going to be getting well into double-digit net effective rental growth in the core of Sydney CBD, and we're really the only new, top-of-the-hill, premium-quality tower.

There is one other, which I call down on Tank Stream, is nowhere near the sort of level of what Chifley South is, and to be honest, the achieved face and net effective rents sort of prove that. We'll be patient about how we do deals in the rest of the tower.

I think of the 20,000 still to lease, we'll probably get 10,000 done with sort of multi-floor tenants, and the rest of it will be whole-floor tenants who literally will have no other choice to go into a whole-floor premium-grade tower at the top of the hill. I think we're going to get a very good result on both the rents and the end value of that new tower.

I'm very relaxed about being where we are with 60%, but it's fair to say I think it'll be higher than that in June, and then higher again in December. I'm not too much in a hurry given the strong growth in rents.

Thanks, David. Just a couple of quick ones for Anastasia.

Just firstly around tax expense, think the rate was around 18% versus 23% in the PCP. Just the driver of that, and how we think about the tax rate going forward?

We've done some cross-staple capital reallocation, $400 million the year prior and $200 million recently. That certainly has, particularly the prior one, had a result in lowering our effective tax rate on CHL side of the staple by about 5 percentage points is our estimation for FY '26.

Thank you. Just the second one around where your weighted average debt margin currently sits and how much that's come down by versus last year, please?

Thank you.

For the headstock main balance sheet, it's come down from 1.65 by 22 basis points. I don't necessarily think it'll land there.

We've got some further plans around refinancing, which actually translates right across the platform. The result today was $10 billion of refinancing, and we're accelerating that pace all throughout the second half.

Across the platform, we reduce margins by 27 basis points, and we expect that to build as a number as we get through that refinancing program just because credit markets are very, very strong, and we're also wanting to lock in the higher covenant headroom that we're achieving across the platform.

Great. Thanks for your help.

Oh, hi, David. Thanks for the presentation.

Just interested in your high-level views. There's obviously been a lot of market discussion about AI and the potential impacts for office, just interested in your views and associated views of capital as to whether that may delay potential office investment.

Look, there's a lot of theories out there. I think there's an unnecessary focus on white-collar employment versus all sectors of the economy.

We're seeing a massive acceleration in automation going into warehousing, whether you want to call it technology AI-driven, the reality is we're seeing an acceleration of what I've seen for 20 years in terms of blue-collar workers being in warehousing being replaced with automation. In terms of the office markets, our view is that if sort of processing-type roles are going to be most at risk from AI, we think that's going to have an outsized impact on suburban office markets, as opposed to sort of core CBD, which is virtually where most of our assets are.

Look, right now, we're continuing to do lots of leasing with both whole-floor and multi-floor tenants, and I'm not seeing any planned reduction in floor space when people are signing up on 10-year leases. I think that just reflects that the whole corporate world's not quite sure whether headcount's going to be materially impacted or whether there's going to be a reallocation of roles and/or whether AI is simply going to augment productivity rather than replace human labor.

That's sort of how we're playing it, and I have a very strong view that the very best modern office buildings in the best core markets will prosper. Right now, who would have thought that net effective rental growth in Brisbane's higher than the Sydney CBD?

That's what's happening. It's tightening up very quickly up there.

We're fortunately sort of been high conviction on Brisbane core CBD for a long time. I don't have the answers.

I don't think anyone's got the answers, but I think if you're going to shape your portfolio towards the very best locations and keep them as modern and as relevant as possible, you'll do better than a lot of other buildings. Our team have constantly reminded me that virtually 90% of all vacancy in most markets, but particularly in Sydney, sits in about a dozen buildings.

Will be no surprise, most of them are sort of older buildings that haven't had capital invested in them and aren't necessarily in the sort of absolute core location. I think each market will be very bifurcated by the quality of the building and its location, and we'll continue to see sort of, if you like, centralization.

That's why I've never liked North Sydney. We're seeing a centralization of tenants relocating into the city because the new Metro basically is taking away the time advantage that used to exist for people to locate in North Sydney.

We're also seeing a flight to modern quality. We've secured ING Bank to move from a pretty old boiler in 60 Margaret into a modern 1 Shelley Street building.

I think these are the sort of bifurcation trends we're seeing, and that's why you'll see us continue to have modern buildings in good locations that are going to attract the tenants. If anyone else can give you a better answer on the future impact of AI, please let me know.

Good stuff. Thanks, David.

Appreciate it. All

right.

Thanks once again for your time, and I'm sure we'll be meeting various people at investor meetings following the results. Thank you.