How Charter Hall’s $84.3bn Funds Under Management Are Driving Growth
Charter Hall Group reported a robust FY25 with a 7.3% rise in operating earnings per security and a surge in funds under management to $84.3 billion. The group’s strategic equity inflows and development pipeline expansion signal strong momentum heading into FY26.
- Operating earnings per security up 7.3% to 81.4 cents
- $3.4 billion in gross equity inflows fueling growth
- Funds under management increased to $84.3 billion
- Development pipeline expanded to $17 billion
- FY26 guidance projects 10.6% earnings growth and 6% distribution increase
Strong Financial Performance Amid Market Stabilisation
Charter Hall Group has delivered a solid FY25 performance, reporting operating earnings of $385 million and a 7.3% increase in operating earnings per security to 81.4 cents. This growth reflects stabilising asset values and a more favourable interest rate environment, which have together spurred demand across the group’s equity segments.
Distributions also rose by 6% to 47.8 cents per security, underscoring the group’s commitment to delivering steady returns to investors despite ongoing market uncertainties.
Robust Equity Inflows and Expanding Funds Under Management
Charter Hall attracted $3.4 billion in gross equity inflows during the year, a testament to its strong market positioning and investor confidence. These inflows were spread across wholesale pooled funds, partnerships, and direct managed funds, highlighting diversified sources of capital.
The group’s funds under management (FUM) climbed by $3.4 billion to reach $84.3 billion, with property FUM accounting for $66.8 billion and listed equities at Paradice Investment Management growing to $17.5 billion. This growth was supported by strategic acquisitions, development investments, and selective divestments that maintained portfolio quality and resilience.
Development Pipeline and Property Investment Portfolio
Charter Hall’s development pipeline expanded significantly to $17 billion, driven by new planning approvals and a focus on modern asset creation. Development completions of $0.9 billion during FY25 reflect ongoing efforts to meet tenant demand and enhance portfolio returns.
The property investment portfolio, valued at $2.7 billion, remains a cornerstone of the group’s strategy with a high occupancy rate of 97%, a weighted average lease expiry of 7.6 years, and stable cap rates. The portfolio’s tenant base is diversified, with government tenants representing the largest exposure, supporting income stability.
Capital Management and ESG Leadership
Charter Hall strengthened its capital position by completing $13.1 billion in new and refinanced debt facilities, achieving lower credit margins and extended loan tenors. The group maintains a conservative balance sheet with low gearing at 6% and $0.7 billion in liquidity.
On the sustainability front, Charter Hall achieved a 77% reduction in Scope 1 and 2 emissions since FY17 and now operates as a net zero platform through onsite solar, renewable electricity contracts, and nature-based offsets. This ESG progress aligns with growing investor expectations and regulatory trends.
Outlook – Confident Growth Amid Stable Conditions
Looking ahead, Charter Hall projects a 10.6% increase in operating earnings per security to 90 cents for FY26, alongside a 6% rise in distributions. This guidance assumes stable market conditions and no performance fees, reflecting a cautious but optimistic stance as the group leverages its strong capital base and development pipeline.
Bottom Line?
Charter Hall’s FY25 momentum sets the stage for continued growth, but investors will watch closely how market conditions evolve.
Questions in the middle?
- How will Charter Hall’s expanded development pipeline translate into future earnings?
- What impact will global economic uncertainties have on equity inflows and tenant demand?
- Can the group sustain its low gearing while pursuing aggressive growth targets?
