I would now like to hand the conference over to Mr. Glenn Willis, CEO. Please go ahead.
Thank you and good morning. Thank you for joining this presentation today, a presentation of Elanor Investors Group's financial results for the 2022 financial year. We appreciate your interest in the group. On the call today, I'm joined by my executive management committee colleagues, and as usual, we'll be pleased to take questions at the end of this presentation. In our presentation, I'll be providing an overview of our results for the last financial year, and I'll make some comments on the progress we've made over the year. Progress in our mission for Elanor to be a leading real estate funds management group in this country.
Indeed, we strive to be known and recognized for our investment performance, leading investment performer in the real estate funds management sector, but also to be known as being a leader in making impactful social and environmental contributions in the communities in which we operate. This is what your management team is striving for. Now following my brief overview of the year, I'll hand over to my colleague, Paul Siviour, Elanor's COO, who will be pleased to take you through our financial results in some more detail. I'll make some closing comments on our outlook at the end of the presentation. I'll now refer to our results presentation pack that we released to the ASX this morning. I'd like to commence by saying that I'm pleased with the growth we achieved in both funds under management and earnings over 2022.
A year that presented challenges in some of our sectors. COVID-related border closures impacted our hotel investments, our leisure park investments, and some of our retail investments over the year. Despite these challenges, we achieved strong growth on all fronts. We grew funds under management by over AUD 680 million over the year to AUD 2.72 billion at the end of the year, this being a 31% increase over FY 2021. As we highlight on page five of the presentation pack, we grew recurring funds management earnings by 48%. Result I'm particularly pleased with, and it's a particular focus of the group to grow recurring funds management earnings. I'm also pleased with the diversity of revenue streams we now have across the group.
These revenue streams not only include funds management fees, which as I said, are growing strongly, but also include leasing fees, development management fees, and hotel operating fees, all of which are growing strongly. The continuing growth in our other revenue streams being performance fees and gains on sales of investments and co-investments. This diversity in revenue streams, we consider very positive for the group, and we now consider it a valuable attribute of Elanor's funds management platform. The growth in the diversity of revenue streams is very much a direct result of the investments we've made in our platform over recent years. We made significant investments in talent and capability over recent times. These investments, I'm confident, will enable us to to grow earnings financially in the future.
Regarding available growth capital, we have significant balance sheet capital, over AUD 50 million, to support our projected growth in funds under management. This capital for new funds management growth will substantially come from recycling our current co-investments. We continue to experience strong investor demand for our funds as a direct result of our strong investment performance. As such, we are experiencing strong demand for our co-investment positions, particularly for our hotel funds, where we plan to further sell down our co-investment holdings from 35%- 15% over the year. In summary, we believe we are well-positioned to grow earnings again this year.
We recognize that market conditions remain somewhat challenging, clearly the interest rate environment has contributed to that, and also the, I guess, the bid offer spread that we're seeing in some sectors where understandably vendors or assets are reluctant to adjust their prices to the changing interest rate environment. Despite the prevailing market conditions, we do indeed believe that we are well-positioned to grow earnings again this year. We are positive, we'd like to add, in regard to the growth opportunities across all of our sectors, retail, hotels, healthcare, and office. Whilst we're not reliant upon growth in funds under management to achieve earnings growth, which is very important to add, we are indeed confident growing funds under management this year notwithstanding.
In short, the ongoing investments we've made in growing our funds management platform and critically, our strong long-term investment track record, we believe position us well for further strong growth in both funds under management and earnings. A final comment before I hand over to Paul Siviour to take you through our results for the year in more detail. I want to point out that the group is well-positioned in regard to interest rate risk. Across the group, our funds are well hedged, and that is a direct result of our philosophy, our interest rate risk management policy. The key tenet of that philosophy is that investors we believe that investors invest in our real estate funds for the real estate exposure on the real estate value upside not to take interest rate risk.
That philosophy obviously has stood us in very good stead now that interest rates have increased substantially. I'll make further comments with regard to our outlook for this financial year later in the presentation, but I'll now hand over to Paul Siviour. Thanks, Paul.
Thank you, Glenn. Can I refer participants on the call to page five of our investor presentation that was released to the market earlier today? This summarizes the key outcomes for the group in FY 2022, and they are elements that Glenn's already mentioned. To re-summarize, first of all, we've achieved strong growth in our funds under management during the year, an increase of 31% to AUD 2.72 billion, and that's despite the current market conditions. Secondly, we've grown core earnings by 21% to AUD 18.3 million, and that is despite COVID impact in relation to those numbers, which I'll speak further about shortly.
Thirdly, we've grown the value of our funds management platform. Yes, evidenced by the growth in our funds management EBITDA, but particularly by the very strong growth in our recurring funds management income of 40%. 48% increase to AUD 32.2 million. And we'll provide some more color to the components of that number during the presentation. Turning to page six, investors in Elanor are very familiar with the key drivers of our core earnings, and they are our funds management EBITDA, the distributions we receive from the co-investments that we make in our managed funds, investing alongside our capital partners. Thirdly, transactional income that primarily reflects gains on recycling of our co-investments and the sale of balance sheet assets. Funds management EBITDA grew strongly by 38% to AUD 14.7 million during the year, and that was without any contribution from performance fees in the period.
Our co-investment income at AUD 7.9 million has been materially COVID impacted, particularly in respect of three funds, the Elanor Hotel Accommodation Fund, the Elanor Wildlife Park Fund, and Waverley Gardens, a shopping center in the south east corridor of Melbourne. Transactional income, I'll remark on later in the presentation when we talk about the profit and loss. You can see at the bottom of the page, core earnings EBITDA. We show the componentry of core earnings EBITDA, which totaled AUD 25.4 million for the year. The reconciliation of that number to core earnings is depreciation, interest and tax. That's set out in respect of the profit and loss that we'll refer to and take you through a little later.
Turning to page seven, we've talked about the continuing growth that we've been able to achieve in the value of our funds management platform. I mentioned the growth in our funds management EBITDA, but we're particularly pleased with the growth in our recurring funds management income. Recurring funds management income is our total funds management income, excluding acquisition fees and excluding performance fees. That really reflects two things, growth and the maturing of our business, but also the capability within our funds management platform and the revenue streams that that generates. Our recurring funds management income of AUD 32.2 million comprises four elements. Our core management fee income of AUD 24 million, our hotel operator fees. Those on the call will be familiar that we have a fully integrated end-to-end hotel operating capability within our platform.
That provides very significant advantages to us in the context of driving investment returns from the hotels that sit within the Elanor Hotel Accommodation Fund. During the year, FY 2022, we generated hotel operator fees of AUD 3.1 million. We also generate strong fees from both development fees and leasing fees. Development fees of AUD 2.4 million during the year, and leasing fees of AUD 2.7 million. That reflects again the capability within our platform in respect of particularly the repositioning of retail real estate for higher and better use. Also the strength of our leasing capability within our commercial office business, where we have very strong points of difference in respect of the assets regarding their comp.
The way they compete within their market, and that enables us, with our skills, to provide very strong leasing outcomes. That's been true during the year. In respect of each of these four revenue streams, we are forecasting growth in respect of FY 2023, and that's just reflecting our current funds under management and our current platform. Just to comment briefly, in respect of management fees of AUD 24 million, we will enjoy further increases in this fee stream by virtue of the increase in our funds under management during FY 2022. A significant increase of AUD 677 million, and we'll enjoy the full annualized benefit of that increase during FY 2023. In respect of hotel operator fees, we expect those fees to grow strongly in FY 2023 for two reasons. Firstly, there is a COVID-adverse COVID impact in respect of the FY 2022 result.
Secondly, we see strong opportunities to grow the fund within our Elanor Hotel Accommodation Fund. Development management fees and leasing fees are also forecast to grow strongly in FY 2023, and this reflects our current pipeline of development projects and repositioning, and I'll take you through some further detail on these two elements further later in the presentation. Turning to page eight. I've referred to an adverse COVID impact on our core earnings result for FY 2022. Of course, we all remember, although it's somewhat in the rearview mirror, that back in November, December and January, there were significant relaxations of mandated operating restrictions and state border closures that were brought in the context of managing COVID at that time.
What we've sought to do is to provide you with some clear guidance in respect of just precisely what that COVID impact has been in respect of FY 2022. The way we have prepared that information is to show you what the annualized results for the affected revenue streams would have been, if we take Q4 2022 actuals as a run rate and annualize that quarter's results, and then compare that to the actual result for FY 2022. What that results in is a turnaround just in respect of the COVID impact on FY 2022 results of AUD 10.4 million. Therefore, if the run rate in respect of these earnings streams remained as it was for Q4 2022 throughout Q4 2023, we would expect to see that level of improvement in our FY 2023 results in respect of these revenue streams.
Just to touch on them individually. I mentioned we've enjoyed a strong level of hotel operator fees during the year, AUD 3.1 million. However, our hotel operator fees are referenced to the EBITDA performance of the hotel, so as to align our interests directly with those of our capital partners in that fund. As the EBITDA performance of the hotels has improved throughout the year, but particularly in respect of Q4 2022, we can see that the annualized impact would be an uplift in those fees of AUD 1.4 million. In respect of co-investment income, I mentioned three funds where distributions during the year were adversely impacted by COVID. The Elanor Hotel Accommodation Fund, Waverley Gardens Fund, and Elanor Wildlife Park Fund.
If one takes the actual distributions that we received in respect of Q4 2022 and annualized it, we would see an AUD 3 million uplift from the earnings we received from these funds in respect of FY 2022. Lastly, which is a component of transactional income. You'll recall from previous calls that we established the Elanor Hotel Accommodation Fund last August and raised AUD 73 million at the time. In respect of that raise, there was a one-off guarantee of an 8% distribution return to our capital partners in that fund for the period from 31st July 2021 to 30 June 2022 and ending on 30 June 2022. That resulted in a one-off non-recurring expense in our FY 2022 core earnings of AUD 6 million.
I now turn to page nine in respect of our confidence in our ability to continue to grow funds under management in respect of current market conditions. What we've demonstrated is that we are able to deliver value to our capital partners by virtue of our investment approach in respect of the assets that we pursue. Secondly, and importantly, in respect of the capability that sits within our funds management platform that generates strong value add to the returns in funds from our ability to reposition real estate, from our ability to manage the operating performance of our hotels, and from our very strong strategic leasing capability within our commercial office and healthcare sector focuses.
In that regard, we feel that our differentiated funds management platform capability positions us well in the current environment to continue to grow funds under management. I mentioned before the growing and strong development pipeline that sits within our managed funds. I can refer now to page 13 of our presentation, just to provide a little more color in that regard. In respect of our retail focus, we have a development pipeline of AUD 200+ million. In respect of our Hotels, Tourism and Leisure pipeline, a pipeline of over AUD 100 million. In our commercial and healthcare sector, a pipeline of over AUD 50 million. This pipeline is current and drives development and leasing fees through the next period and beyond.
In respect of the retail development pipeline on page 14, we've set out there some information in respect of the key components of that pipeline. In summary, this pipeline reflects our capability in repositioning retail real estate for higher and better use, and to focus it increasingly on everyday needs and secure income. The pipeline relates to projects that deliver a strong yield on cost, and that reflects in increased value for our capital partners in those respective managed funds. In relation to the hotel development pipeline, the pipeline relates particularly to facility upgrades and room refurbishments. That drives revenue improvement and particularly average daily rates for the rooms. Similarly to our retail development pipeline, we see a very strong yield to our managed funds in respect of the cost of those repositioning projects.
Just referring now to our funds management section, page 19. Not to elaborate really at all, but page 19 shows our continued growth in funds under management year by year to AUD 2.72 million. Page 20 sets out both the growth in our funds management income year by year, but importantly, the components of that funds management income. Again, that highlights the strength of the recurring funds management income flows. Page 21, I'll leave you to look through at your leisure, but that outlines our particular funds management initiatives during the year that have underpin our growth in funds under management. Can I just turn briefly to our interest rate risk management in respect to the group's managed fund?
Glenn referred to it specifically, and it's a very important focus to enable us to provide investment opportunities that are real estate-based, focused and don't have speculation around interest rates or interest rate risk as a key element of returns. You can see that across our managed funds, our weighted average hedging profile is 71%. That hedging profile is particularly strong in office and healthcare, where those revenue streams are more consistent and regular. It is lower in Hotels, Tourism and Leisure. That is because within our Elanor Hotel Accommodation Fund, we have decided to only hedge that debt to 50% of the debt. That's because hotels provide a natural inflation hedge, and that is because you can effectively reprice average daily room rates on a daily basis.
In respect of retail, we're hedged to approximately 60% of the debt, and the element that isn't hedged relates to our development facilities that are drawn down progressively to meet our development pipeline, and also a number of assets that are close to their investment horizon. I'll just touch on page 24, where we outline the elements that comprise our total co-investments in managed funds of AUD 219 million. As Glenn Willis mentioned, we have growth capital from the recycling of co-investments to support our growth in funds under management, and we've shown there some key elements to that. One is our intention to sell down our co-investment in the Elanor Hotel Accommodation Fund to 15%, which would release AUD 40 million of capital for application to new managed funds.
We've also outlined there four funds that are becoming closer to their investment horizon that would also mean we could recycle our co-investment within those funds. Page 25 sets out the distributions we've received on each of our co-investments. I won't go through that because I've highlighted the elements where there's been COVID impact. Turning now to page 27, our core earnings summary. I'll just mention briefly the AUD 11.2 million profit on sale of assets and co-investments. This is driven particularly in respect of our hotel platform and relates to the sell down of our co-investment in Elanor Hotel Accommodation Fund and the predecessor funds. And also a gain on the sale of an asset from the balance sheet. These streams of income are less easy to forecast.
As we recycle our co-investments, we do expect further gains and therefore further transactional income. Turning briefly to the balance sheet, I would just point out again the growth capital that sits within our equity accounted investments, AUD 219 million, and our gearing conservative at 30%. Finally, just on page 29, we've outlined the elements of the successful refinancing of the group's debt in June 2022. That is debt of AUD 105 million and structured in a way that is very capital efficient for Elanor.
That is a base level of unsecured notes, both fixed and floating notes of AUD 40 million, and then a fully revolving senior secured debt facility of AUD 65 million, which enables us to manage our capital requirements well in the context of both drawing on that facility, and then reducing it in respect of cash flows, and sell downs of co-investment prior to reinvestment in new managed funds. On that note, I'll hand back to Glenn for some closing remarks and also some commentary in relation to our outlook.
Thanks, Paul. As I said earlier, we, the Elanor team, your management team, strives to be a leading real estate fund management group in this country. Indeed, leading the way, for investment performance and known for delivering investment outperformance. We're also. We also strive to be known and recognized for delivering impactful social and environmental contributions. On page 17 of the pack, we covered just some of the sustainability achievements we've made over the year. I'd like to point out a few achievements that I'm particularly proud of. Particularly, I'm proud of the impact, the group is making in regard to disadvantaged kids across the country through our partnership with The Smith Family.
This is a strategic partnership that we continue to invest in, recognizing that we as a group are indeed fortunate, importantly, and recognizing that we have the people and resources to make an impact in this area. Our strategic partnership with the FSHD Global Research Foundation, a foundation that focuses on finding a cure for FSHD, which is an insidious muscular dystrophy that affects thousands of Australians and millions worldwide, somewhat unknown disease, not regarding the effect it has on many people. The disease that my friend and former business colleague Bill Moss suffers from. FSHD Global, who we support, is a global leader in finding a cure and making great progress with the support of Elanor and many others.
Other call-outs I'd like to make, the team across the group is executing on many important energy initiatives across our portfolio, particularly with our retail and office investments, where the team has and continues to make significant accomplishments in that area. The teams in our hotels division and leisure parks division are executing on numerous environmental initiatives at our investments, and again, making significant accomplishments in those areas. We continue to make progress in regard to our broader sustainability objectives. I am indeed proud of the social and environmental contributions the team is making across the group, and indeed, impactful sustainability is at the heart of Elanor and will continue to be so. Important to add that. In closing, if you turn to page 31, where we summarize our outlooks.
As I've mentioned, and as Paul has mentioned as well, we believe we're well-positioned to grow funds under management in the current environment. We see the current environment being one that genuinely suits value investors, which we well and truly consider ourselves to be and are. While we've grown, made some fantastic investments and grown the business over the last several years, it's been more difficult to find value over the last several years with the historically low interest rates, et cetera. We believe these changing conditions, and we're excited about these changing conditions presenting opportunities to grow funds under management.
Again, as we've mentioned, we believe that we are well-positioned with our current portfolio, with our current funds under management, with our current business, with our current revenue streams to grow core earnings this year. Paul's taken us through the why we believe that is the case. In short, we are positive about driving security holder value with the growth capital we have available to us, with the growth prospects that we have across our sectors, most importantly with the capability and the talent that we have with our management team. On that note, I think we will take questions.
Thank you. If you would like to ask a question, please press star one on your telephone and wait for your name to be announced. If you'd like to cancel your request, please press star two. If you are on a speakerphone, please pick up the handset to ask your question. Your first question comes from Edward Day from MA Financial. Please go ahead.
Good morning. Thanks for the presentation. Just wondering if you can provide some commentary on the momentum within the hotels, the hotel fund. Just, you know, really what you're seeing in terms of occupancy and rate compared to maybe six months ago.
Well, I'll introduce Marianne Ossovani, who's head of our Hotels, Tourism, Leisure division, and Marianne, please give us an update on rates and occ in that area. Marianne.
Absolutely. Hi, Ed. Look, we've really seen the demand return. It started to return in December last year. We certainly built that momentum through January. Since then what we've seen is the market recover. That demand is back. You know, we finished towards the end of last year, you know, achieving above 60% in occupancy, that's continuing through this year. That's what we're seeing, coming into this current financial year. Rate has held. If you look at our budget for last year, we actually, we've budgeted a lower rate this year but it's already tracking ahead of it. We're seeing that hold, and the business on the books, the business that we're writing is continuing to hold and increase, beyond our expectations into the future.
There's business being written every day, whether it be business that's sitting on the books now or those prospects that we're working, but we continue to see strength in that rate going well into the next 12 months, and that occupancy continuing to build.
Thank you. Just on the color you've provided on your development opportunities, do you have a feel for the capital contribution from ENN with regards to those?
Ed, there is no capital contribution from Elanor in respect of that development pipeline. It is all secured by debt facilities that we can draw down to execute on the delivery of those development projects.
Okay, thanks. That's all.
Thank you. Once again, if you would like to ask a question, please press star one on your telephone and wait for your name to be announced. As there are no more phone questions, I'll now hand back to Mr. Willis for any closing remarks.
Thank you, and thank you all for your interest in Elanor Investors Group. We appreciate you attending our call today. I'd like to close by thanking my colleagues across the group. I said earlier the reason why I am confident and we are confident about our growth prospects is because of the, you know, the talent, but also the commitment and dedication of the team at Elanor. It's a team that's well and truly striving to achieve our broader mission for the group. Thank you for your attendance today, and look forward to keeping you all updated as we make further progress. Thank you very much.
That does conclude our conference for today. Thank you for participating. You may now disconnect.