childcare centre
Childcare centres are popular among commercial property investors. Image: Gautam Arora, Unsplash
  • Statutory profit up to $57.8 million
  • 99.6 per cent of rent collected
  • Acquired several non-childcare related properties

Social infrastructure real estate investment fund Charter Hall Social Infrastructure REIT (ASX: CQE) has today released its half-year results for FY 21.

The ASX-listed fund is Australia’s largest real estate investment fund that invests in social infrastructure projects, most notably childcare properties.

The statutory profit has increased to $57.8 million – an increase compared to the same period last year which saw a $49 million statutory profit.

Achievements from the past year include 99.6 per cent of rent collected in the period – very high considering the pandemic.

There was also an increase in its WALE – Weighted Average Lease Expiry – by 1.3 years to 14 years. This was primarily driven by 58 leases being extended to an average of 20 years with Goodstart, a major tenant.

Travis Butcher, Charter Hall Social’s Fund Manager, believes the results were consistent with their strategy especially in terms of sustaining income and improving the quality of tenants.

“CQE is well positioned in the current economic environment with low gearing and $130 million of investment capacity to deliver secure income and capital growth to investors,” said Mr Butcher.

The property portfolio for the fund has diversified from its traditional childcare social infrastructure to include larger social infrastructure assets.

One acquisition included the $122.5 million Mater Headquarters & Training Facilities in Brisbane for a 10-year term with completion for the building due during the June 2021 quarter. This allows the fund to gain exposure to the health sector.

In November 2020 the fund purchased the new South Australian Emergency Services Command Centre which will be leased to the South Australian Gviernemt which will represent 85 per cent of the property’s total income.

63.3 per cent of leases are now on fixed rent reviews, an increase of almost 10 per cent from June 2020 when it was only 53.6 per cent of leases.

During the first half of FY21, 340 childcare properties were valued that resulted in a 2.9 per cent valuation increase.

Investors will see a distribution of 7.5 per cents per unit.

As of 2pm AEDT, shares in CQE are up by 0.85 per cent at $2.97. The shares have steadily increased since the low of $1.59 seen in April 2020 but are yet to reach the pre-Covid level; just under a year ago on the 20th of February, CQE shares closed at $3.83.

This means the 1-year return from today is – 16.48 per cent.

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