This article is from the Australian Property Journal archive
STRONG rental growth across its $2.2 billion childcare and medical real estate portfolio saw Charter Hall Social Infrastructure REIT (CQE) net a 10.9% increase in net property income over the first half.
However, it swung to a loss compared to the prior corresponding period (pcp), from a $40.6 million profit to a $10.9 million loss.
Operating earnings were steady on the pcp at $29.6 million, at 8.0c per unit.
Earnings per unit was shaved down to $8.0 million and distributions were down from 8.6c to 8.0c.
Net property income lifted from $47.7 million to $52.9 million, driven by like-for-like rental growth of 3.5%, with the balance generated from property acquisitions, development and disposal activity.
There was $22.32 million of divestments made from six older and/or competition-affected eastern seaboard childcare centres in the half, at an 8.8% premium to book value, and average yield of 4.6%.
CQE’s fund manager, Travis Butcher, said “active portfolio curation remains a key strategy” for CQE.
“The active divestment program contributes to improving portfolio quality, earnings resilience and tenant covenant strength.””
CQE’s total portfolio is 100% occupied and has a yield of 5.1%, with a weighted average lease expiry of 12.8 years. It has market reviews across 46% of the portfolio in the next five years.
Revaluations over the half resulted in a 1.2%, or $26.8 million decline on book values.
CQE re-confirmed its FY24 distribution guidance of 16.0 cents per unit.
