Two becomes one as Harrison assumes Charter Hall leadership

Property veteran David Harrison has been unveiled as Charter Hall Group’s chief executive as long-time joint managing director David Southon departed amid a broader shake-up of the near $16 billion real estate funds empire.

Harrison, who joined the group as joint managing director ahead of its 2005 float, will head the group on his own after a 12-year partnership with Southon, and he is bullish about the opportunities ahead.

“I think the appetite for real estate will continue … sharemarket volatility is actually helpful as it redirects the focus around the low volatility of real estate,” he says.

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A hard-driving former real estate agent with knack for both direct property and broader merger plays, Harrison says he will focus on “securing new growth opportunities (and) further developing relationships with our investor and tenant customers”.

He said the group had built up holdings across the office, retail, industrial and hospitality sectors, adding “we look to capitalise on these positions and embark on our next phase of growth”.

David Southon did a great job of building the business on the funds side and doing a lot of important things, but the importance of a CIO will help remedy any shortfall that may exist

The shift was approved by the group’s board over the weekend after a long process that both directors had backed since mid-2015.

Charter Hall chair David Clarke says the lengthy process — in which the two joint managing directors were each considered to lead the company — led to the decision as the group positioned for its next phase.

“Given the group’s significant growth, the work undertaken by the JMDs on building the leadership team through a number of key appointments and in positioning the business for the future, we believe now is the appropriate time to move to the single CEO/MD structure,” Clarke says.

Southon will be available to Charter Hall for up to 12 months to facilitate the handover and, although a non-compete applies for this period, he has been linked to other senior roles.

The board is there for a purpose and the board is there to control the company ultimately and they know it intimately well

Charter Hall will shift to a sector model, appointing Adrian Taylor as head of office, Greg Chubb as head of retail and Paul Ford as head of industrial. Richard Stacker will become head of investor relations, with Nick Kelly shifting to head direct property.

The group will also appoint a chief investment officer, heading strategy, mergers and acquisitions, corporate development and transactions.

Harrison’s employment terms will remain unchanged but he will now be in line for total remuneration of $3.9 million per annum, including incentives.

Charter Hall confirmed that its earnings guidance for fiscal 2016 remained unchanged and JPMorgan executive director Adam Fairfax says the switch will not have a big impact.

“David Southon did a great job of building the business on the funds side and doing a lot of important things, but the importance of a CIO will help remedy any shortfall that may exist,” he says.

He notes there is some market caution over the changes at Charter Hall.

“However, the board is there for a purpose and the board is there to control the company ultimately and they know it intimately well,” he says.

This article originally appeared on www.theaustralian.com.au/property.