Charter Hall closes Australia\'s largest opportunistic property fund

Charter Hall Group announces the close of Australia's largest wholesale opportunistic property fund, Charter Hall Opportunity Fund No.5 (CHOF 5). CHOF 5 is the fifth in a series of highly successful and strongly performing opportunistic property funds managed by the Charter Hall Group.

The response to CHOF 5 has been extremely positive with applications to the fund being heavily oversubscribed, requiring allocation scale back to the Fund's self imposed maximum cap of $300 million in committed equity. CHOF 5 follows the successful CHOF 4 capital raising of $165 million in 2005 which coincided with the IPO of Charter Hall Group and represents the largest wholesale capital raising in Australia to date for an Australian opportunistic property fund. The completed value of projects that may be delivered by CHOF 5 is anticipated to approximate $1 billion over the next 5 years.

The Group's past performance and strong alignment of interest between Charter Hall as the Manager and its investors has lead to approximately 74 percent of the capital being committed from repeat investors in the CHOF series. Additionally, Charter Hall has also secured commitments from several new clients to the Group, many of which are recognised leading superannuation funds in the industry. Development Director and Fund Manager for CHOF 5, Michael Winnem said "our track record in securing quality development projects and the ability to manage these projects with our in-house development teams is a key element to the success of our opportunity funds. Our investors recognise this and the CHOF 5 raising is an endorsement of our model".

CHOF 5's mandate has expanded from the previous 4 funds to include the consideration of opportunistic investments in New Zealand. The geographic expansion of CHOF 5's mandate follows Charter Hall's expansion with offices now in Auckland, Brisbane and Perth.

CHOF 5 has an objective of delivering an equity internal rate of return in excess of 20 percent per annum over its fixed term life. The Group, both directly and through one of its other managed funds, has committed to a $50 million co-investment in CHOF 5. This further aligns the interest of the Group with its wholesale investors and provides its listed investors with access to attractive  opportunistic returns on this co-investment together with fund management, development management and performance fees from the Fund.

The most recent fund CHOF 4, which is still in its investment and delivery phase, is forecast to deliver the highest return of the Charter Hall series of opportunistic funds to date, underpinned by major office developments in progress at Mounts Bay Road in Perth and Northbank Plaza/275 George Street in Brisbane, in addition to a significant bulky goods development in Artarmon on Sydney's North Shore. CHOF 4's first project at 420 George Street, Brisbane was developed and sold in mid 2006, with wholesale investors achieving an internal rate of return on equity in excess of 90 percent per annum.