Image: Canva, Charter Hall.
  • Statutory profits increased $184.4M
  • Portfolio 100% occupied
  • Portfolio has long WALE of 14.3 years

Charter Hall Social Infrastructure REIT (ASX: CQE) has released its full-year results. The company’s statutory profit increased $184.4 million on the prior corresponding period to $358.5 million.

In other financial highlights, the company achieved operating earnings of $62.9 million or 17.3 cpu. The company had a balance sheet gearing of 29.8% with investment capacity of $160 million.

Statutory profit $358.5 million Up $184.4 million
Operating earnings $62.9 million Up 8.4%
Operating earnings 17.3 cents per unit Up 8.1%
Distribution 17.2 cents per unit Up 9.6%
Gross assets $2.1 billion Up 35%
Net tangible assets $4.08 per unit Up 25.5%

Source: Charter Hall Social Infrastructure REIT.

“CQE has continued to actively manage the portfolio and increase its weighting towards larger-scale social infrastructure assets. This has delivered an improvement in portfolio and tenant quality and diversification providing improved security of income and long-term capital growth for Unitholders,” said Charter Hall Social Infrastructure REIT’sFund Manager, Travis Butcher.

Childcare assets bolstering portfolio

CQE’s property portfolio saw a valuation increase of $269.4 million or 19.4%, with $232.7 million in social infrastructure assets acquired during FY22. This included 23 childcare assets, two strategically located healthcare assets, and a 50% interest in a recently completed TAFE Queensland education campus.

The childcare portfolio was acquired for $157.3 million, with an average initial yield of 4.7%. The acquisitions are all leased to high quality childcare operators including Goodstart, G8 Education, and Only About Children, on average lease expiries of 14 years, and are located in Victoria, Western Australia, and Queensland.

CQE’s healthcare acquisitions totaled $43.4 million, and the 50% interest acquisition in the TAFE Queensland education campus within the Gold Coast growth corridor of Robina was made for $32 million.

Portfolio $1.97 billion
WALE 14.3 years
Occupancy 100%

Source: Charter Hall Social Infrastructure REIT.

Charter Hall Social Infrastructure REIT’s portfolio grew by 38.8% to $1.97 billion through both acquisition and valuation activities during the year and has a long WALE of 14.3 years. CQE properties are 100% occupied. In other portfolio highlights, less than 5% of leases expire within the next five years, three-quarters of leases are on fixed rent reviews (average 3%) and the balance is CPI linked.

CQE also divested non-core assets, including four childcare assets with short lease expiries, realising $16.5 million. CQE said these divestments achieved a 69% premium to prior valuations.

Six developments were completed in FY22, with a total value of $42.3 million and long average leases of 16.7 years. The developments provided a valuation uplift upon completion of $8.6 million or 25.5% and a yield on cost of 5.8%. CQE’s childcare development pipeline comprises a further eight projects, of which 5 are forecast to be completed during FY23.

Charter Hall Social Infrastructure REIT opened trading today at $3.80, and at the time of writing was trading at $3.72.

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