The Charter Hall Group (ASX: CHC) share price went up more than 2% today in response to FUM rising to around $52 billion.
Charter Hall is one of the largest property management businesses in Australia.
What did Charter Hall say?
After seeing the latest property revaluations, Charter Hall revealed the impact on the group funds under management (FUM).
Charter Hall said the group’s FUM platform will generate gross valuation increases of $3.3 billion, including $0.6 billion of development capital expenditure, which will result in the forecast group FUM rising to approximately $52 billion at 30 June 2021.
Group FUM has increased $12 billion over the course of FY21, providing 28% growth of FUM.
The industrial properties saw 10.8% net valuation growth over six months and 15.5% over 12 months.
The office properties saw 2.9% net valuation growth of 2.9% over six months and 3.7% over 12 months.
The long weighted average lease expiry (WALE) retail experienced a net valuation growth of 8.7% over the last six months and 14.5% over 12 months.
The social infrastructure properties have seen a 7.4% increase in valuation over six months and a 9.9% valuation increase over 12 months.
Finally, the shopping centre retail properties have seen a 1.2% increase in valuation over six months and 1.3% increase in valuation over 12 months.
Management comments
The Managing Director and CEO of Charter Hall, David Harrison, said: “Today’s valuation outcomes demonstrate the success of our investment selection process. We’ve seen impressive valuation gains across most sectors, delivering strong returns for our investors.
“Our focus on securing long-leased assets to high quality tenants, delivering strong returns for our investors. Our focus on securing long-leased assets to high quality tenants, often secured through off-market scale-and-leaseback transactions, or through our develop-to-core development pipeline, continues to deliver attractive enhanced returns.
“The net valuation growth for FY21 of $3.7 billion in addition to the $1.8 of capex during FY21 has complemented the $7.8 billion of acquisitions and $1.8 billion of divestments, resulting in $6 billion of net acquisitions for FY21 to date.”
Summary thoughts on Charter Hall and the share price
Charter Hall is a quality property manager. It’s generating good capital growth for investors as well as pleasing rental profit and distributions.
However, with interest rates seemingly about to start rising, I’m not sure what that’s going to mean for valuations and demand for commercial property over the next decade.
There are other ASX dividend shares that I’d rather look at with that in mind.
