CHARTER HALL property group, the new manager of two Macquarie...

CHARTER HALL property group, the new manager of two Macquarie Bank trusts, is in for a busy few months but real estate analysts are confident it will emerge as a formidable entity in the sector.

Charter Hall was established in 1991 but went public in 2005. It is a diversified real estate investment trust involved in property ownership, funds management, development, asset management and property investment banking.

It is unusual as it has an internalised structure comprising Charter Hall Limited and Charter Hall Property Trust, as well as managing several unlisted and listed funds with assets in the office and retail sectors.

With the Macquarie deal, Charter Hall's assets under management will be about $10.2 billion across 18 funds.

As part of the deal, Charter Hall will take a 7.5 per cent stake in Macquarie CountryWide, to be renamed Charter Hall Retail REIT.

For the six months ending December 31, the group reported a net loss of $65.8 million. But after accounting for one-off losses on sales of an asset and other non-cash items, the profit was $14.8 million, down from $20.9 million in the previous corresponding period.

But the group's joint managing directors, David Harrison and David Southon, said the bottom of the current property cycle had been reached and the coming six months to 12 months would be positive.

The interim distribution was 1.6 cents, with the company forecasting a second-half payment of between 1.4 cents and 1.6 cents.

UBS's analysts said the result was broadly in line with its operating profit forecasts.

''We believe Charter Hall remains well placed to achieve the full-year 2009-10 earnings per security guidance of 4.1 cents and distribution of 3 cents to 3.2 cents. Balance-sheet gearing is 11.9 per cent as at December 2009,'' the analysts said.

According to a UBS research team, Charter Hall's first-half results provided investors with a chance to focus on its core business.

''Access to new external capital is slowly improving, with one of its funds looking to raise about $300 million this year, providing Charter Hall with the potential to earn off-balance-sheet development management fees - a key driver of earnings in 2010-11 and beyond in the absence of a cyclical rebound in asset values,'' the research team reported.

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