Charter Hall Social Infrastructure REIT (ASX:CQE) Releases 1H FY25 Results
Financial Performance
Charter Hall Social Infrastructure REIT reported operating earnings of $28.5 million, or 7.6 cents per unit, for the six months ending 31 December 2024. The REIT declared distributions of 7.5 cents per unit and maintained a net tangible asset (NTA) of $3.82 per unit. Statutory earnings reached $31.0 million, with a weighted average debt maturity of 3.4 years.
Operational Highlights
During the half year, CQE acquired a modern pathology laboratory in Perth for $47.0 million at an initial yield of 6.4%, settled in January 2025. Additionally, the REIT divested childcare assets totaling $84.0 million, achieving an 8.6% premium to book value and an average yield of 4.6%. The property portfolio stands at $2.1 billion, featuring a long WALE of 11.9 years and 100% occupancy. Weighted average rent reviews were 3.5% for the 12 months to December 2024, with a 16.4% increase on childcare market reviews.
Executive Comments
Fund Manager Travis Butcher stated, “The Fund’s portfolio is in a strong position with an 11.9 year WALE, 100% occupancy and significant rental growth potential through market reviews on 43% of the portfolio’s income over the next four years. Recent market rent reviews on 15 properties delivered a 16.4% increase, highlighting the under-rented nature of CQE’s childcare portfolio. Active portfolio curation remains a key strategy for CQE to deliver earnings and distribution growth. The acquisition of a pathology laboratory in Western Australia leased to Clinipath Pathology at a 6.4% yield is consistent with our strategy to invest in social infrastructure property delivering essential community services. This was funded through the divestment of 16 childcare assets throughout the half for total consideration of $84 million at an average yield of 4.6%. This highlights the ongoing demand and liquidity for childcare property.”
Outlook and Guidance
CQE expects to continue executing its strategy and actively managing its portfolio of high-quality social infrastructure assets to maintain income security and capital growth. The REIT has increased its FY25 distribution guidance to 15.2 cents per unit, up from 15.0 cents per unit, and will continue to pay quarterly distributions. Additionally, CQE plans to conduct an on-market buy-back of up to $25 million in units.
Motley Fool contributor Abbie Stokes has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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