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Highlights
• Citi lifts Charter Hall’s target price to AUD22.50, reflecting a 22% increase
• Australian REIT sector tailwinds cited as key driver behind the target upgrade
• Investment management business sees solid equity inflows and higher funds under management

Citi has revised its outlook on Charter Hall Group (ASX:CHC), raising its 12-month target price by 22% to AUD22.50 per share. The re-rating reflects the investment bank’s updated view on the Australian real estate investment trust (REIT) sector, which has recently benefited from improving macroeconomic conditions and investor sentiment.

The upward revision also incorporates stronger-than-expected performance from Charter Hall’s investment management business. According to the company’s most recent financial disclosures, Charter Hall attracted notable gross equity inflows during the first half of the year—signaling continued confidence from institutional and wholesale investors. These inflows have helped drive a AUD2.5 billion increase in the firm’s Funds Under Management (FUM), taking the total to AUD83.4 billion as of the reporting period. Of this, AUD66.4 billion is attributed to property-focused FUM.

Charter Hall has also ramped up its acquisition activity. In the first six months of the current fiscal year, the group completed AUD2.2 billion in acquisitions, already exceeding the full-year total for the previous fiscal cycle. This heightened transaction volume is seen by Citi as a key indicator of operational scale and market relevance, particularly as the Australian commercial property landscape shows signs of selective recovery.

The REIT sector more broadly has witnessed a modest rebound, supported by expectations of interest rate stability and an improving inflationary backdrop. These developments have prompted some analysts to revisit earnings forecasts and valuation models for large-cap players like Charter Hall, which derive a significant portion of revenue from recurring investment management fees and property income.

Despite ongoing structural challenges across parts of the commercial property market, Citi’s valuation case appears underpinned by a combination of improved sentiment, sector-wide tailwinds, and Charter Hall’s consistent ability to attract capital and deploy it effectively. The AUD22.50 price target suggests potential upside from recent trading levels, although market risks—including interest rate shifts and economic uncertainty—remain key considerations for investors.